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MoneySavingExpert.com makes formal complaint to energy regulator
Ofgem is urgently investigating incorrect exit fees information from major suppliers
The regulator Ofgem is contacting a number of major energy suppliers about their exit fee policies, after a MoneySavingExpert.com investigation revealed many customers approaching the end of their fixed-term tariff have been wrongly told they'll have to pay to switch.
MSE has sent a formal letter of complaint to Ofgem about the issue, along with a dossier of evidence showing how customers have been misinformed.
The regulator's rules on penalty-free 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 without cost.
Despite crystal-clear regulation, MSE has been receiving evidence of customers being given false information by energy companies since December. Ofgem was alerted to the problem immediately, but we’ve had new complaints and further evidence from disgruntled customers, prompting the formal complaint.
· In December, Npower customers who applied to switch within the 49 days received a confirmation email telling them they’d have to pay exit fees.
· In January, despite assurances that the “system error” causing these emails was being fixed, MSE continued to receive new evidence from customers still being given incorrect information.
· The terms and conditions of an expired British Gas tariff also wrongly stated exit fees would be charged.
· MSE has also had a report that E.on has given out wrong information.
On receiving the complaint, Rachel Fletcher, senior partner for consumer and competition at Ofgem, said: "We are concerned that consumers are potentially being misinformed about their right to switch fee-free during the switching window at the end of fixed term contracts.
"We are following this up with suppliers as a matter of high priority, and we will work to make sure action is taken where it’s needed."
Archna Luthra, head of energy at MoneySavingExpert.com said: “It is absolutely outrageous that energy suppliers are so blatantly flouting the rules. These rules were put in place to protect consumers and give them the confidence and time to switch to a better deal at the end of a fix. Exit fees can be up to £100, so the threat of being charged is a significant one. Energy prices are rising so it is vital customers are able to switch to a cheaper tariff without being misled.
“It is encouraging to see Ofgem prioritise MoneySavingExpert's complaint - and it now needs to take enforcement action and show energy suppliers they can't get away with these shoddy practices.”
· MoneySavingExpert.com will continue to follow the progress of this complaint and would like to hear from any energy customers who continue to be affected. Consumers can email email@example.com.
· To see if you can switch and save up to £200/year on your energy bills, use MSE’s freeCheap Energy Club.
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About MoneySavingExpert.com: MoneySavingExpert.com is dedicated to cutting consumers’ bills and fighting their corner. The free-to-use consumer finance help resource aims to show people how to save money on anything and everything, and campaigns for financial justice. Set up in 2003 for just £100, its free-to-use, ethical stance quickly made it the UK’s biggest independent money website, according to internet ranking site Alexa.com, and the number one ‘Business and Finance – Business Information’ site, according to Hitwise. It has more than 12 million people opted-in to receive the weekly Martin’s Money Tips email, and more than 15 million unique monthly site users who visit more than 26 million times a month. In September 2012, it joined the MoneySupermarket.com Group PLC.
About Martin Lewis: Martin Lewis OBE, Money Saving Expert, is the journalist and consumer campaigner who created MoneySavingExpert.com, the UK’s biggest money website. He’s the UK’s most internet-searched man, Citizens Advice’s Consumer Champion of the Year, and has spearheaded major financial justice campaigns including bank charges reclaiming (over six million template letters downloaded) and PPI reclaiming (over five million) and a successful large-scale campaign to get financial education in schools. He has his own prime-time ITV programme, The Martin Lewis Money Show, as well as regular slots as resident expert on Good Morning Britain, This Morning and Radio 5 Live, among others.He was appointed OBE in the Queen’s Birthday Honours in June 2014.