Business energy users could find themselves inadvertently paying up to 40% more than necessary for their energy by overlooking the expiry date of fixed-term contracts, according to the Energy Advice Line.
Julian Morgan, managing director of the price comparison, switching and advice service for energy users, said firms that failed to switch suppliers at the end of fixed deals were automatically flipped to expensive standard rates, often without realizing it.
“Businesses need to be vigilant and make sure they know when they are coming to end of their fixed-term contracts,” Mr Morgan said.
“Firms that forget to switch suppliers once these contracts end and sign up to a new fixed deals are automatically flipped to the suppliers’ expensive standard tariffs.
“For example, one of the Big Six suppliers is currently stating a standard tariff that is 40% higher than the best price that we could offer a business by switching. Domestic consumers are facing this problem too.
“Suppliers are still relying on customers not being pro-active when their fixed contracts end and falling into the trap of paying the standard tariff.”
Until the regulations changed recently, firms that failed to give timely notice to a suppler that they intended to leave and sign up to a cheaper deal elsewhere, were automatically rolled over and locked into standard tariffs for a minimum of 12 months.
Although this practice has now been stopped in most instances, business energy users are still required to give suppliers 30 days’ notice that they are switching to another company.
Mr Morgan said that if a firm overlooked the expiry of their fixed term contract they might not realise they had been flipped to an expensive standard tariff until they received their first bill months later. This might be even longer if a firm has to log onto their online account to retrieve the bill because they are easier to overlook.
“Lots a tactics are being employed by suppliers to maximize their profits at the expense of customers,” Mr Morgan said.
“Even if a firm decides to stay with their existing supplier and sign up to a new fixed-term deal, they probably won’t be rewarded for their loyalty.
“In our experience, fixed-term deals offered to existing customers are 10–20% more expensive than the best deals available by switching.
“Our advice to business is to use an independent and reputable switching service like ours two or three months before the expiry of your fixed contract to find the cheapest deal.
“We can arrange the switch so that it is seamless and a firm never has to pay the standard tariff.
“As part of our free service, we also offer a reminder service so that a firm cannot overlook when a fixed-term contract is coming to an end. It just makes sound financial sense.”
The Energy Advice Line is a consumer champion and an independent price comparison and switching service for householders and small and medium-sized businesses. The service enables consumers to quickly and simply compare electricity and gas prices, and to switch to the best available deal on the market.
The service also offers free advice and a contract management service, including alerts to remind business consumers users when their fixed-term energy contracts are about to end.
For further information, visit www.energyadviceline.org.uk