Ofgem has announced a new plan to give customers the freedom to change energy supplier at the end of a fixed term contract without being hit with cancellation fees.
Ofgem plans to ensure all customers have the ability to switch to the best value deals they can find, rather than being tied down to expensive tariffs.
However, if a customer does not make the switch by the end of their contract the supplier can “roll a customer that has not made an active choice onto a further fixed-term tariff.”
According to Ofgem, any new tariffs have to be the same price or cheaper than the variable tariff the customer would have been transferred onto.
The tariff should also be of a similar format, have the same online management, meter and method of payment.
Ofgem’s view is that these procedures will ensure customers are always given the option of a better deal.
Neil Barnes, Associate Partner of Consumers and Competition states: “This decision does not require suppliers to change their default contracts for customers at the end of fixed-term tariffs.”
“But we strongly encourage them to take advantage of the extra flexibility our decision provides and to make changes where it is in their customers’ interest to do so.”
“Suppliers need to do more to get all their customers, particularly those on poor value standard variable tariffs, a better deal.”