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Gas and electricity competition - information for consumers

You could save money by switching energy suppliers but comparing suppliers and choosing the right deal for you can be confusing.

Energy suppliers promote their services through advertising, direct mail, telephone or doorstep selling. Each supplier will have different tariffs (the rate you pay for gas and electricity). Check which tariff suits your circumstances then compare tariffs between suppliers. If you sign a contract with a new supplier you may be able to change your mind depending on where and when you signed. Ofgem and Consumer Focus can provide you with more information on this.

In the guide
Switching supplier
Promotional activities
Do I have to change?
What should I ask before signing a contract?
Will I be able to change my mind once I've signed a contract?
What about different tariffs and dual fuel?
Double charging
High pressure selling and forged contracts
What should I do if I have a complaint?
Challenging a contract under the law
Gas and electricity competition - consumer checklist

Switching supplier
Before switching supplier, consider getting impartial information on the benefits and problems. You will find a number of free services online that will help you switch supplier, although you should be aware that comparison websites may not be comparing every available provider. A number of comparison website are accredited to the Consumer Focus Confidence Code.

Promotional activities
Energy suppliers promote their services in a variety of different ways:

  • advertising - on television, radio, in newspapers, magazines, or over the Internet
  • direct mail - leaflets through the door
  • telephone - you may be asked to agree to receive more information, or a visit from a representative, or you may receive an text message on your mobile phone
  • doorstep selling - a supplier's representative may call at your door unannounced or make an appointment to sell you new gas services, electricity services or both

Do I have to change?
No, you are free to remain with your existing supplier. Until you sign a contract with the new supplier, they cannot supply you.

Use your last year's bills or your annual statement to work out how much you spent on gas and electricity. Don't forget to include the standing charge if you pay one. You can use this information to compare suppliers.

Research suppliers and their offers carefully and remember that if one supplier cuts its prices, the others may follow. Wait until prices stabilise before going ahead. If you decide to change supplier do not be rushed into signing a contract. Always shop around for the best deal.  

Always read the small print before signing the contract.

What should I ask before signing a contract?
When you sign up with a new supplier you will enter into a legally binding contract. The contract will contain many terms and conditions relating to such matters as which tariff will apply, current charges, method of payment, cancellation periods and the duration of the contract. Always ask your new supplier to go through the main points of the contract before you sign.

The transfer process can take up to six weeks and is organised by your new supplier so there is no need to contact your current supplier. Your new supplier will contact you for your meter readings - always keep a record of these readings for yourself. Your current supplier has the right to object to a transfer - if you are in debt with them, for example. Ask about arrangements for paying off outstanding debts.

Will I be able to change my mind once I've signed a contract?
This will depend on where and when you signed the new contract. If you signed at home following a visit from the supplier's representative, you must be given a notice of your right to cancel which gives you seven working days  in which to change your mind and cancel the agreement. The contract is unenforceable if a cancellation notice is not provided. For more information see our leaflet 'Your rights to cancel when buying at home'.

If you agreed the contract to switch suppliers at a distance and without face to face contact with the supplier, such as online or by telephone, you must be given a period of seven working days in which to cancel. This is calculated from the day after you agreed to go ahead with the contract. During this time, you can change your mind and cancel the contract. You must do this in writing. See also our leaflet 'Shopping at home - your guide to the Distance Selling Regulations'.

Some companies may give you longer to change your mind. Ask about the cancellation period and always check that it is written on the contract.

If you sign on the trader's premises you will not have any automatic right to cancel the agreement.

What about different tariffs and dual fuel?
There are many different tariffs offered by energy suppliers to suit the individual circumstances and needs of the householder. Generally they fall into categories such as standard tariffs, online tariffs (discounts offered for managing your account online, such as paperless billing), tariff for paying by direct debit, green tariffs (supporting renewable energy), pre-payment tariff (rate may be higher) and fixed price/capped tariff.

Dual fuel is where one supplier supplies both your gas and electricity. This does not necessarily mean that it will be cheaper. You may be able to obtain your gas and electricity cheaper from different suppliers. If you decide to opt for a dual fuel contract, make sure you know how much you will be paying for each service and what the billing arrangements are.

Double charging
The process of switching suppliers does not always run smoothly. Watch out for an overlap where your old  supplier continues to charge you when a new supplier has taken over your supply. If this happens, try to resolve it directly with the supplier, that has incorrectly charged you. Provide details of the new supplier's contract and start date and ensure it has your final meter readings, as agreed with the new supplier. If the problem is not resolved, contactCitizens Advice for further assistance.

High pressure selling and forged contracts
Some consumers are unfortunate victims of rogue sales representatives who have falsified contracts or progressed contracts without consent in order to make a commission. The consumer may only become aware of this when they receive a 'welcome' letter or copy contract from a new supplier.  If you believe you may have encountered this fraudulent practice report it to Citizens Advice .

To tackle this issue, Ofgem introduced the Erroneous Transfer Customer Charter. It recommends best practice for suppliers including writing to a consumer to verify that they do want to switch before going ahead. In the event of an erroneous transfer, you can contact either the old supplier or the new one to complain. Within five working days, you should be given clear information on the steps which will be taken to resolve the matter and, if you request it, details of compensation arrangements. Within 20 working days, you should be informed that you are being returned to your old supplier.

Some suppliers have moved away from cold call doorstep selling as a method of persuading consumers to switch, as they recognise that consumers do not like being pressured on the doorstep.

What should I do if I have a complaint?
Contact Citizens Advice for further assistance.

Challenging a contract under the law
The Unfair Contract Terms Act 1977 and the Unfair Terms in Consumer Contracts Regulations 1999 protect consumers from becoming tied into contracts where terms are unfair. Terms which may be considered unfair include:

  • those which mislead consumers about their legal rights
  • those which bind consumers to the contract unfairly
  • unfair penalties such as disproportionately high cancellation charges
  • automatic contract renewal where the option to prevent the renewal is not available or is onerous
  • those which limit liability for death and personal injury

Gas and electricity competition - consumer checklist
Beware of bogus callers - always ask for and check identification.

Never be pressured into signing a contract. If you have doubts - do not sign.

If you are asked to sign any document, such as an introduction form or proof of visit form, check that it is not an agreement. If you have any doubts - do not sign.

Always check for hidden extra costs and termination charges before you sign.

If you have any special needs such as a pre-payment meter or arrangements for paying bills, check that the supplier can accommodate you. The supplier is not allowed to refuse your business on the basis that you have special needs.

How much will the gas or electricity cost? If you are looking at price comparison tables check that the same level of service is on offer.

Is the contract rolling or a fixed time contract? Rolling contracts last for as long as you want them to.

How long is the contract? Will you be tied to that supplier for a number of years? What about cancellation charges?

Are there any standing charges? If so, how much?

What payment options are there? Are the prices different if you pay by direct debit or opt for paperless billing? What about bills, pre-payment meters or instalment plans? Do you have to pay extra if you wish to pay by a method other than direct debit?

How often will you get a bill or statement?

What other services are on offer? Are there any energy saving measures that could reduce the bill?

Are there any dual fuel deals that could reduce the bill?

What help can the supplier give to repair or service your boiler, gas or electricity appliances?

What help can the supplier offer if you have difficulty paying your bills?

Give your existing supplier 28 days notice of your intention to switch.

Take a meter reading on the determined date of transfer to ensure that you are not charged twice for the same fuel.

Sales representatives can be very persuasive so be careful. Don't commit yourself until you are totally satisfied that you have all the information you need and never sign a document until you have read the small print.

Please note
This leaflet is not an authoritative interpretation of the law and is intended only for guidance. Any legislation referred to, while still current, may have been amended from the form in which it was originally enacted.

For further information please contact the Citizens Advice consumer service, which provides free, confidential and impartial advice on consumer issues. Visit www.adviceguide.org.uk or call the Citizens Advice consumer helpline on 08454 04 05 06.

Relevant legislation
Unfair Contract Terms Act 1977
Unfair Terms in Consumer Contracts Regulations 1999

Last reviewed/updated: May 2013

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