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Why does my tariff auto roll onto the expensive variable Simpler tariff at end of contract?

  • 3 April 2020
  • 2 replies
  • 70 views

Hi David,

 

Please send me your trust pilot link. Our conversation was pointless this morning. 

 

My point is very clear:

 

You choose as a company not to roll you’re clients on to the best tariff at the end of there contract, you instead default to the “ standard tariff" when there contract expires. You could simply agree to roll the contract over to the best tariff for you at the end of the contract term .This could be agreed to at the point of signing up to the contract. The contract is 12 months rolling and will automatically default to the best tariff for the next 12 month period, i would of happily done this. That easy. Happy customer, great reviews. No money or time spent by you guys dealing with me. But do you make more out of the approximately £150 per year ripping your customers off on “standard tariffs”. 

 

You choose to not do this. This is a case of wont not can’t the system is in place. You place the onus on the customer. Break away, be the first energy company to offer this. I don’t think you want to as you profiteer off whatever percentage of you’re customers don’t call you up to renew the contact at the end of the term. Its a SCAM.

 

Life is about choices. You guys choose to rip your customers off. You could lead the industry but you are just rip off merchants like all the other providers.

 

I can’t be asked to leave now or i would. Please ensure i am on the best rate for the next 12 months.

 

Best Wishes

 

Matt

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Best answer by Tim_OVO 3 April 2020, 17:26

I’m going to jump on in with this one - thanks for posting @matt1111 

 

Fixed tariffs: you agree to a contract lasting x number of months. With leaving fees should you leave the contract early. We are now protected against a loss, and can buy your energy (roughly how much we think you’ll use in a year) in bulk at the start of the contract, on the cheap. Passing the savings on to you. 

 

Variable tariffs: we are not protected from you switching supplier, and have to buy your energy in smaller amounts, with a shorter time horizon, and a higher premium. This is why (in general) the variable tariff is more expensive. You trade flexibility of supplier and tariff, for price. 

 

We certainly can’t assume you’re going to stay with us for another X number of months, once your current contract is up. Instead, we contact you 6 weeks before the contract end date, then again we contact you 2/3 weeks before, then just after the contract end date. Every time giving you all of your options. We also provide self service renewal options throughout this period. If after that we still don’t hear from you, we stick you on the variable tariff. At any point, you can then fix in. 

 

I honestly can’t think of a fairer and more transparent way of doing it. What do you think? 

 

More info on our tariffs here!

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Userlevel 7
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Hi @matt1111 and welcome to the Forum. We are fellow customers here, rather than OVO themselves.

Customer Services (and whoever David is) do not monitor what we discuss.

Having said that, I hear what you say!

I investigated this point myself a while ago and found that the actions to be taken at End-Of-Contract form part of the Ofgem Guidelines on which all Energy Suppliers are audited.

Suppliers may not move customers onto any of their lower cost “fixed” tariffs because those have exit penalties and that would effectively lock in the customer to the term of the tariff, which is usually 1 or 2 years.

Nor can Suppliers have a special tariff set aside for this scenario, whilst a customer is guided towards a new contract. This is because they are limited to offering very few tariffs for each of gas and electricity.  That avoids potential customers being bamboozled by too wide a range of tariffs and conditions when they compare alternatives.

These Ofgem requirements have been put in place due to pressure from us - the British public - to be treated fairly.

The result is that all British domestic energy Suppliers will drop you on to their standard variable tariff if the contract runs out and you have not (yet) signed up for another.

To give you time to evaluate your position, no Exit Fees may be charged if you switch contracts within the last 7 weeks of your existing one.

OVO actually send out an email to notify customers when this 7-week window opens up.

 

On the plus side, we will soon see the demise of these fixed-term contracts. The country is moving towards a domestic energy supply strategy called Demand Side Response. We will use Smart Meters to charge us different rates throughout the day, based on half-hour time slots.

This Time-of-Use (TOU) Tariff means that we can better use the renewable energy resources that the country has been investing in. Currently when there is surplus generation it is discarded and the generation company gets compensated for their loss of revenue. That money comes from the Network Charges component of our electricity bills.

Clearly such a waste of energy is unsustainable. In future we will be able to purchase that electricity at much lower prices.

Perhaps that sort of tariff would better match what you’re looking for.

Userlevel 7

I’m going to jump on in with this one - thanks for posting @matt1111 

 

Fixed tariffs: you agree to a contract lasting x number of months. With leaving fees should you leave the contract early. We are now protected against a loss, and can buy your energy (roughly how much we think you’ll use in a year) in bulk at the start of the contract, on the cheap. Passing the savings on to you. 

 

Variable tariffs: we are not protected from you switching supplier, and have to buy your energy in smaller amounts, with a shorter time horizon, and a higher premium. This is why (in general) the variable tariff is more expensive. You trade flexibility of supplier and tariff, for price. 

 

We certainly can’t assume you’re going to stay with us for another X number of months, once your current contract is up. Instead, we contact you 6 weeks before the contract end date, then again we contact you 2/3 weeks before, then just after the contract end date. Every time giving you all of your options. We also provide self service renewal options throughout this period. If after that we still don’t hear from you, we stick you on the variable tariff. At any point, you can then fix in. 

 

I honestly can’t think of a fairer and more transparent way of doing it. What do you think? 

 

More info on our tariffs here!

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