NPOWER and E.On have been forced to update their customer service practices, after Ofgem found that both energy suppliers had incorrectly told customers they would have to pay an exit for leaving them within the 49-day "switching window".
In Npower's case, their offences occurred between June 2016 and February 2017, when they sent 22,000 customers a letter incorrectly warning them about exit fees.
With E.On, their mistakes stretched back to the period between October 2013 and February 2017, although in their case their call centre staff incorrectly advised only 450 customers.
Yet while E.On have updated their call scripts and Npower have changed their letter templates, the ongoing Ofgem investigation into British Gas' advice on exit fees suggests that customers should always remain cautious of what their suppliers tell them.
The issue investigated by Ofgem essentially revolves around one of their energy license conditions, which states that "suppliers cannot charge exit fees for switches within the 49-day 'switching window' before a fixed term contract ends".
It also states that providers have to contact their customers between 42 to 49 days before a fixed tariff ends, informing them that they can make a switch without having to pay the exit fee.
Unfortunately, this is something both Npower and E.On failed to do.
In Npower's case, 22,000 of the letters they're obliged to send mistakenly informed customers that they'd have to pay £60 to switch within the 49-day window, while 450 E.On customers were told by call centre staff they'd also have to pay to switch.
Given that this kind of misconduct by the two suppliers undermines attempts by Ofgem to increase switching numbers, there's little doubt it represents a serious offence.
Ofgem have therefore forced the two companies to make their procedures more compliant with regulations.
In Npower's case, they've updated the letter they send to customers during the 'switching window', while in March they paid compensation to four customers who cancelled switches after being given false info.
Meanwhile, E.On have updated the script their call centre staff follow, as well as paid out £21,000 to customers who either delayed or cancelled switches.
While this offers reassurance to existing Npower and E.On customers who might worry about the reliability of information they're provided by their suppliers, problems with exit fee guidance extend beyond these two companies.
In July, it was announced by Ofgem that they'd also be investigating British Gas regarding complaints brought against them by customers, who claimed that they were being told by the provider of the need to pay exit fees during the 49-day window.
In one case, there was even a report of one customer actually having to pay British Gas £40 in order to make a switch within this window.
Extra Energy are another supplier who've reportedly been the subject of complaints relating to exit fees, although in their case no formal investigation into them has been launched by Ofgem.
That said, Extra are the most complained-about supplier in the UK by a wide margin. According to Citizens Advice's latest complaints table, they received 1,970.5 complaints for every 100,000 customers (the next lowest provider was Total Gas and Power at 463.5).
|Contract Natural Gas Ltd||20.2|
The top ten major energy providers for the fewest number of complaints, and Extra Energy at 15th
Unfortunately, a breakdown of these numbers according to the subject of complaints isn't available, so it's not clear what role if any exit fees might be playing in their poor performance.
Regardless, the examples of Npower, E.On, and British Gas show that customers need to be careful when evaluating what they're told by their supplier regarding exit fees.
Many major suppliers are losing customers as a result of recent price rises, while their staff often have targets to meet for retaining customers.
As such, it might not be much of a surprise that once in a while commercial pressure leads suppliers and/or their staff into making untrue claims.
This is why customers should always check with Ofgem, Citizens Advice or any other consumer-facing group when they suspect that what they're hearing from their provider isn't exactly true.
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