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How to avoid paying exit fees or termination fees

By Energy Company Numbers on February 9, 2016 in Help and advice
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Being charged an exit or termination fee can be incredibly frustrating, especially if you have been a loyal customer for many years. And when your supplier puts their energy prices up – which they will eventually, you can end up paying more for your energy than you should be. The good news is it is possible to avoid unnecessary exit fees altogether.

Avoid paying exit fees by referring to “notification of price changes” as set out by Ofgem

A lot of energy suppliers have an exit fee on their tariffs, however you shouldn’t have to pay an exit fee if your supplier has raised their prices.

Domestic energy suppliers like E.ON and Npower are only allowed to charge a termination or exit fee during the fixed term period of a fixed term contract. A price change while under a fixed term contract is a ‘change in contract’ and you can avoid paying an exit fee by saying this, although many customer service advisers will not know what you mean, so you may need to talk to an account manager. Refer to Ofgem’s Standard Licence Conditions 23 and 24, notification of price changes.

So to reiterate, if your supplier increased your prices while under a fixed contract, you can switch without paying an exit fee. One thing to keep in mind however, is that to avoid paying a termination fee under the circumstances, you must notify your current supplier in writing or orally (writing is best, send it by Special Delivery) on or before the date of your intention to switch supplier. As long as you do this, then you will have followed the rules and you shouldn’t be charged an exit fee. Moreover, you are free to switch supplier whenever you like to avoid exit fees. You don’t have to give your current supplier a switching date, and you don’t actually have to switch. You can take out a new cheaper tariff with your current provider, penalty free.

Choose a supplier who doesn’t charge exit fees

It sounds simple, but many people don’t bother shopping around for tariffs with no exit fees. British Gas for example have no exit fees across all their tariffs so you can switch supplier or tariff at any time without penalty, and Ovo Energy do not impose termination fees on new customers (although they may charge one if you downgrade your plan).

About the Author

Energy Company NumbersView all posts by Energy Company Numbers
Energy Company Numbers is a telephone number directory service dedicated to helping UK consumers keep in touch with their energy suppliers.

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