Energy tariff exit fees cost up to £600
Customers on fixed tariffs typically paid £60 to exit their dual fuel deal within contract. But according to MoneySavingExpert.com, it found these costs are 10 times higher than they were this time last year.
Its research found Outfox the Market charges the highest exit fee at £600 on its one-year dual fuel deal, up from the £0 – £67 it charged in June 2021.
Ovo Energy maintains its £60 exit fee on its one-year fixed dual fuel tariff, but it has doubled the exit fee from £60 to £120 on its two-year fix.
British Gas, EDF and Scottish Power have ramped up their exit fees to £200 and £300. Meanwhile SSE charges £60 on its two-year deals, whereas a year ago it charged up to £150.
So Energy now charges £60 on its one-year fix and £120 for its two-year offering, up from the £10 it charged for its one-year fix.
Martin Lewis, founder of MoneySavingExpert.com, said these higher exit fees now make it more difficult for customers to decide whether to fix their energy deal.
He said: “These massive, outrageous early exit fees, are the final nail in the coffin of dying energy competition. Many people are trying to decide whether to fix or not at the moment. That no longer means going cheaper, it’s about whether you should pay more now, to forestall the huge rise likely coming in October.”
MoneySavingExpert.com added that in the case that people lock in to available tariffs and prices start to fall, the high fees “could wipe out any potential savings from switching”.
It reminds customers that they have a 14-day cooling off period and no exit fees can be charged for those within 49 days of the end of a fixed contract.
Under energy regulator Ofgem rules, suppliers are allowed to charge exit fees which customers are made aware of when signing up to a tariff. Suppliers are required to make this clear.
However, under the Consumer Rights Act 2015 which protects customers from unfair contract terms (which includes energy), excessively high early exit fees may be considered to be an unfair contract term.
An Ofgem spokesperson, said: “Our top priority is to protect consumers which is why just this week we’ve announced robust new measures to stop customer money being used like an interest free credit card by energy suppliers.
“In terms of exit fees, we fully expect suppliers to make sure charges are fair and equitable and rules are clear that termination fees are allowed but should be proportionate. The Citizens Advice energy shopping guide also provides essential information to help you know how to shop for the best tariff for you.”