E.ON calls for industry-wide approach to ending automatic rollover contracts for SMEs
E.ON is urging all UK energy providers to support its call for an industry-wide end to the process of automatically renewing fixed term contracts for small businesses.
A consultation with customers found that 86% of small business customers would prefer to negotiate a new contract or move to a more flexible agreement rather than automatically being ‘rolled’ on to a new long-term fixed deal1 which is currently standard practice across the industry.
E.ON’s call – submitted to industry regulator Ofgem – follows major improvements in how the company works with its small and medium-sized business customers; including contract end dates on customer bills, a fair negotiation policy for customers who have missed their renewal window, a commitment to a maximum one-year period for backdated bills and helping to set up an independent code of practice for business energy sales.
These initiatives have been well received by customers with complaints well down and higher levels of engagement and negotiation.
Anthony Ainsworth, Sales and Marketing Director of E.ON UK, said:
“The message from small businesses is clear; they want greater simplicity, straight-talking and fair play.
“We know from our own business customer panel and from independent research that the majority of small businesses just don’t like the automatic rollover process and find it too complex which is why we are urging the industry to work together to make things simple and more straightforward.
“If this is going to work the industry and the regulator have to work together and create a level playing field, offering clarity, consistency and simplicity for customers. For any one supplier to act alone risks layering greater complexity on to an already confusing situation.”
James Constant, CEO of Business Juice said:
“Energy is a necessity for businesses, not a luxury, so to be unfairly trapped into a poor value rollover contracts by energy companies is shocking and unnecessary. We fully support E.ON’s approach to the ending of rollover and we hope the rest of the industry take note.
“We hope that this is the first in a raft of changes we will see from energy industry participants in order to further improve the competitive nature and customer service within the non-domestic energy space.”
E.ON’s recent service changes came as part of its Reset Review which set out to listen to both residential and business customers. Reforms were designed and implemented through its dedicated SME customer panel and in conjunction with a variety of industry trade bodies, both energy-specific and those representing individual sectors, to ensure it brings genuine, measurable benefits for its business customers.
Anthony Ainsworth added:
“We see considerable customer benefits of an industry approach to this and we believe this issue is best solved through three actions; banning auto rollovers, launching the Ofgem TPI Code of Practice and tackling the sale of products which customers believe are fixed but allow the supplier to ‘pass through’ increases in third party costs. These three will have a far reaching impact and we will achieve the better outcomes for micro business customers we and Ofgem are seeking.”
E.ON reforms to improve service to SME customers already include:
- A maximum one-year period for backdated bills, becoming the first major energy supplier to commit to these protections for all small business customers.
- First major supplier to publish contract end dates on bills, letting customers know exactly when their deal is up for renewal and what they can do about it;
- Introduced a reminder letter for those who don’t contact us when they receive their first renewal letter;
- Clearer communication on automatic contract rollovers – ensuring customers are made aware that they can opt out of being signed up to a fixed deal if they miss their renewal window;
- Introduced an independent set of standards for energy broker sales – supported by over 100 independent brokers – and aligning ourselves to those same standards;
- Improved billing standards to get more bills right first time;
- Smarter meters, pay-as-you-go contracts and energy management so customers can budget better and manage their cash flow.