Watchdog criticises firms' transfer policies

Two small business energy suppliers have been heavily criticised by the industry watchdog for taking advantage of the inefficiencies of their larger rivals and imposing "savage" time restrictions on their contract transfer policies.

Energywatch has singled out gas provider Business Energy Solutions (BES) and Electricity4Business (E4B) for censure, referring multiple customer complaints against both suppliers to Ofgem, the regulator, for consideration.

Both use contract conditions to insist customers switch to new suppliers within a certain timeframe after contracts expire: in the case of BES this is 24 hours and E4B has a seven-day cut off. Any that have not managed to switch by then are automatically renewed on new long-term contracts with BES and E4B. The problem is that switching takes longer than many small business owners think.
The market is dominated by six big suppliers - British Gas, Powergen, Npower, EDF, Scottish Power and Scottish & Southern - and between them they control over 95pc of the market. Energywatch says it takes on average four weeks for the process to complete, although this is contested by E4B, which says it can switch customers to a new supplier "at the press of a button".

Industry regulations mean suppliers can only begin the transfer process 28 days before the end of a contract, so on Energywatch's calculations the terms imposed by BES and E4B leave little margin for error.

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