Green Star Energy has been wrongly telling some customers nearing the end of their fix they'll have to pay exit fees of £30 per fuel to switch, MoneySavingExpert can reveal.
The energy regulator Ofgem's rules on switching are extremely clear - if you're in the last 49 days of your fix, you DON'T have to pay an exit fee and can switch to a different provider penalty-free.
We've been campaigning on this since 2016, when we first revealed British Gas and Npower had wrongly told customers they'd have to pay exit fees. Other firms have also made mistakes, and an investigation into British Gas by the regulator Ofgem is ongoing.
Now Green Star Energy - a smaller supplier which as of January had around 200,000 customers - has emerged as the latest firm to get it wrong. After a MoneySaver found an error in one of its switching letters, it launched an urgent review of all its communications.
To check if you can switch and save £100s on your gas and electricity, use our free Cheap Energy Club.
How was the error spotted?
Bob Dawson, 59, from Manchester, contacted MoneySavingExpert after Green Star Energy told him he'd have to pay "termination fees" of £30 per fuel if he tried to switch before the end of his fixed tariff.
Bob spotted the error in a letter the firm had sent objecting to his switch, on the grounds he still owed them money due to an outstanding amount on his account.
The letter said: "Please note you will also be subject to termination fees of ££30.00 [sic] (inc VAT) if you cancel your contract before the end of the fixed term period."
However Bob knew this wasn't how it should work, as he was within the 49-day penalty-free 'switching window' at the end of his fixed tariff. He said: "I knew about the exit fees through MSE - if I'm switching I read the whole lot, and one of the MSE pages talked about this switching window."
When we contacted Green Star Energy, it told us there was an error in the letter and it would review all its other communications as a matter of urgency. It initially feared it may have wrongly charged customers on 35 separate occasions, but has now confirmed no one has actually been charged in error.
Bob's now received an apology from Green Star Energy, and confirmation he won't be charged exit fees.
A spokesperson for Green Star Energy said it amended the letter within 24 hours of being made aware of the issue. She confirmed it was a standard letter which had been sent to other customers.
It's not clear how many customers may have received the letter, though at least one other MoneySaver has told us they received one with the same wording.
What ARE the rules?
Ofgem's rules state that customers must not be charged exit fees if they leave during or after the ‘switching window’, which is defined as "49 calendar days before a fixed-term contract ends".
You can apply to switch at any point during a fixed-term contract without having to pay exit fees, as long as the switch is actually completed during the switching window.
How energy firms have got it wrong on exit fees
We've been campaigning on this since 2016 - here's a quick recap:
- Dec 2016. We revealed British Gas and Npower had wrongly told some customers they'd have to pay exit fees. British Gas's T&Cs for a collective fix wrongly stated customers would have to pay, without mentioning the 49-day penalty-free switching rule. It said it then "updated" its wording. Npower customers applying to switch within the last 49 days of their fix were sent confirmation emails telling them they'd have to pay exit fees – it blamed a system error and said it would change its emails.
- Jan 2017. We received fresh complaints from customers of Npower, with some still being sent emails saying they'd have to pay to switch despite leaving within the switching window. Npower blamed an "error" within its system. An E.on customer also reported being wrongly told she'd be charged when calling the provider – it apologised for what it called "an isolated incident".
- Mar 2017. MSE lodged a formal complaint with Ofgem and presented a dossier of evidence - we'd had further reports of Npower, British Gas and Extra Energy customers being given wrong info. Npower said it had stopped sending confirmation emails and was contacting customers who'd been given the wrong information, while British Gas and Extra Energy said customers wouldn't be charged.
- Jul 2017. Ofgem announced it was to investigate British Gas over its switching terms. Ofgem also said it was talking to Npower and E.on about exit fees but not investigating them.
- Sep 2017. We revealed that British Gas had charged a customer exit fees to switch tariff WITHIN the penalty-free switching window. British Gas later refunded the charge.
- Dec 2017. Npower and E.on apologised for misleading customers over exit fees after Ofgem looked into the issue. The regulator is continuing to investigate British Gas.