Economy Energy to hit thousands with 'ghastly' £300+/yr rise – but you can escape it
Economy Energy is hitting thousands of customers with an astonishing £300+/year rise – but many will be able to escape it by switching away, or in some cases an admin blunder means they'll beat the hike.
The fact the price is rising is not a surprise, as most energy firms are increasing costs. What is shocking is the scale of the rise, which is as big as we can remember in recent years. While on average it will lead to a rise of £311/yr on typical use – 38% – some are set to be hit with an increase of up to £460/yr. The hike hits on Sunday 7 October.
As it's a variable tariff you can at least switch penalty-free, but we have learned scores of bill-payers were wrongly told it was actually a fixed deal whereby the price per unit of energy was fixed for a year. This admin blunder was made in a 'welcome' email sent by Economy Energy.
After MoneySavingExpert.com got involved, Economy Energy told us by phone it would not levy the hike on anyone who could prove they got this email (see it below, with the important lines highlighted).
But since, when we've asked for confirmation in writing all throughout this week, it's gone quiet, which we find outrageous. However, some MoneySavers who got this email have told us they've successfully challenged the rise.
The tariff, called Switch Saver and actually advertised at its launch as a variable, was available during May and June this year, costing an average of just £811/yr for a typical household. It was second cheapest on the market at the time.
Scores of MoneySavers have vented their anger in emails and on social media, as many were told of the hike in emails. They were stunned not only at the size of the increase, coming so soon after signing up to the tariff, but also bemused as they believed their rates were fixed – according to information shown on the earlier welcome emails.
When we found out, we urgently contacted Economy Energy, and it told us it would honour the deal as a fix at the rates you signed up to, as stated in your welcome pack, provided you could prove it.
However, despite chasing on numerous occasions it hasn't been able to confirm this to us in writing or clarify exactly what proof you need. We also don't know if it'll be actively contacting customers – so check your emails and challenge the increase.
If you don't want to stick with Economy Energy, you can switch penalty-free – use our free Cheap Energy Club comparison to find a new deal.
'This is a ghastly rise – get out quick'
Guy Anker, deputy editor at MoneySavingExpert.com, said: "A hike of £300+/yr is, quite frankly, ghastly. Everyone who took up the variable tariff, you can leave penalty-free, so the message is clear: get out quick.
"For those customers told in welcome emails their deal was fixed, Economy Energy must honour the fix and not put prices up for them. The fact it's now gone quiet is shambolic but we will continue to press it to keep its verbal pledge so no one who got this email ends up paying more."
What do I need to do?
Though Economy Energy has told us it will honour the tariff as a fix, it hasn't answered our follow-up questions, or confirmed it in writing.
The best thing to do is to find your welcome letter and check if it states the tariff is fixed, and shows you the date until when the price is guaranteed, and challenge the rise – through its complaints process if necessary.
Check your emails for this document. It was sent from Economy Energy (firstname.lastname@example.org) with the subject line 'Welcome to Economy Energy'.
We've seen a few MoneySavers successfully challenge the hike. One was told by an Economy Energy staff member: "Please accept my apology, we will be honouring the variable Switch Saver tariff as a fixed rate specified on your welcome pack to you until the date specified, this is only fixed tariff rates not fixed direct debits."
Why was I told it was fixed?
The tariff was listed as a variable tariff on application, so consumers should have known they were signing up to a tariff where the rates could go up or down at short notice.
However, after switching to the tariff some people were told that it was, in fact, a fixed deal with a specific end date.
Information from one MoneySaver shows the firm told them it was a fixed tariff, with the price guaranteed until 4 June 2019 (see above) – and we've seen similar evidence from others.
Some have forwarded copies of notices sent to them of the scale of the increases. The example below shows one MoneySaver being hit with a combined hike for electricity and gas of more than £360.
Economy Energy hasn't told us how or why this might have happened – when we asked, it remained tight-lipped, and simply urged customers to contact it if they have any problems.
'Was my rate not fixed?'
We've also noticed that in the last few days Economy Energy's social media feeds have been closed – so you can no longer seek help through Facebook or Twitter. You can still contact it using the details above, however.
What does Ofgem say?
Though Ofgem wouldn't comment directly on this, a spokesperson said: "We carefully monitor the way in which suppliers treat their customers, and are aware of the ongoing billing issues with Economy Energy.
"While we're not able to comment on Ofgem's ongoing compliance work, we routinely monitor suppliers' compliance with regulatory rules. We typically liaise directly with suppliers where there is evidence of potentially widespread or serious problems."