Consumers authority ACM has drawn up new rules to encourage energy companies to offer customers more fixed contracts but is warning people to check offers very carefully and be wary of aggressive sales techniques.
The rules, which will come into effect on June 1, aim to give “consumers security and protects them from any price increases in the energy market,” the ACM said on Monday. Fixed contracts fell out of favour during the surge in energy prices.
With a fixed contract, consumers and energy firms agree the price of energy and the length of the contract in advance. If consumers terminate a fixed contract early, they have to pay compensation to the company, to offset any loss of expected income.
In the new system, the termination fee will be no more than equal to the energy supplier’s loss but, the ACM warns, it could still be high if the price difference between the old and new contract is large.
It recommends consumers calculate carefully whether switching to a cheaper contract pays off and whether they can afford the compensation.
The agency also says it has received an increasing number of reports of aggressive and misleading selling. In some cases, for example, consumers have been told on the phone that their current supplier is on the verge of bankruptcy and that they should switch quickly when this is not the case.
ACM consumer affairs director Edwin van Houtens said the organisation is investigating companies at the centre of the complaints. “We would also urge consumers to pay attention as well,” he said. “An unsolicited telephone offer is never the best choice.”
Consumers will still be able to opt for a variable price contract or a dynamic price contract where the price can vary by the hour or by the day. Neither of these types of contract carry a cancellation fee.
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