Price hike alert as energy firms face new rules on rip-off deals
There are some big changes on the way that will dictate how electricity and gas suppliers treat customers. They are being forced on energy companies by regulators and will mean more competition and make it harder for them to rip off customers.
From next year, electricity and gas suppliers will have to give customers a month's notice when their discount rate is coming to an end.
The Commission for Energy Regulation is making more than 60 changes to the suppliers' rulebook. The changes, some of which have been called for in this column, are pro-consumer. They are designed to make sure that householders are not mis-sold, misled, or mistreated by suppliers.
The changes, which take effect from next year, are to be applauded. The aim is to make energy offers easier to understand and to give customers information to ensure they get better deals.
Even doorstep sales agents will have to abide by the strict new rules that are being put in place to make sure householders are not misled and fully understand energy deals before signing up.
One of the most important changes is that electricity and gas suppliers will have to send customers a written notice 30 days prior to the expiry of a fixed-term contract. In other words, you have to get good advance notice that your discount deal is coming to an end. This is stop you rolling back onto expensive standard tariffs.
This is a simple, but hugely important, innovation and something that was advocated in this column.
From next year, energy suppliers advertising new deals will also have to say how much it's likely to cost an average household for a year.
According to Simon Moynihan, of price-comparison site Bonkers.ie, this will shine a light on confusing discounts, incomplete information and ambiguous marketing messages.
It will also ensure that consumers are properly informed before signing up to new deals. What this means is that if a supplier says something is the cheapest it will have to prove it in writing.
Firms will also have to notify you if you have been on the same deal for three years.
Other changes include rules to make it as easy for pay-as-you-go customers to switch suppliers as credit customers and a tightening of the rules around doorstop selling, an area often open to abuse.
All the changes will mean hassle for energy suppliers. Watch as they try to recoup the extra costs involved by raising prices.
They have been slow to cut prices when wholesale prices fell, but they will be quick to raise them.
Sunday Indo Business