“The beginning of the end,” is how retailers have hailed the announcement of proposed new rules from Ofgem to limit automatic rollovers of energy contracts.
The proposal, which remains open on the Ofgem website until August 28, would require suppliers to change their practices around contract renewals.
They would have to:
- include the consumer’s estimated annual consumption, current prices and the automatic renewal prices on the renewal letter,
- require consumers to give no more than 30 days’ notice if they want to leave at the end of a contract, rather than the current 90-day maximum,
- acknowledge receipt of a termination notice within five working days.
While it says it is not proposing an outright ban on automatic renewals, Ofgem does say it has “concerns” over price differences between suppliers and may consider a ban on automatic renewals in the future.
According to Ofgem, only 2% of business consumers said their current contract had rolled over without their knowledge.
The big six energy suppliers have all agreed to end the practice of auto-rollovers, and told Ofgem they would like to ban them outright. Smaller energy suppliers remain wholly against the practice.
ACS chief executive James Lowman said: “A number of the measures announced today in the consultation are ones we have campaigned for, so we applaud Ofgem for listening to the concerns of small businesses.
“Our members do not believe there is a place in today’s marketplace for automatic rollovers. We urge Ofgem to move swiftly to outlaw automatic rollovers altogether in the coming months.”
If agreed, the changes will be introduced by the end of March next year.
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