Energy companies are bullying their business customers into unfair contracts and overpaying, according to a survey published today by the Association of Convenience Stores (ACS).
The survey, which polled convenience store owners across the country, reveals that more than a third of those polled have been overcharged by their supplier over the past year and more than one in four have been hit with backdated bills, requiring them to pay out thousands or risk disconnection.
ACS chief executive James Lowman said: “For too long now, energy companies have been tying their business customers into unfair contracts and tariffs leaving hard working businesses like local shops no option but to pay over the odds for their energy usage. We are calling for Ofgem to take swift action to stop the bullying practices of energy companies by outlawing rollover contracts, limiting the backbilling period to 12 months and giving business customers the information they need to choose the best tariff for them."
Shadow Secretary of State for Energy and Climate Change Caroline Flint MP said: “After years of ripping off hard-pressed families and pensioners, this survey shows that energy giants are turning their fire onto shops and small firms. Small businesses are the backbone of the British economy, but the big energy companies are getting away with highway robbery.
“Lots of firms are getting caught out by the small print when they sign up for new deals, or put on rip-off tariffs when their contracts end. To add insult to injury, when energy companies give dodgy meter readings or get the bill wrong, small businesses can be forced to pick up the tab for up to six years – leaving them with crippling debts. The rip-off has to stop.
“Like families and pensioners, many firms are struggling with soaring fuel bills. Labour’s plan would stop the big energy companies ripping off our small businesses and give a shot in the arm to Britain’s struggling economy.”
Other findings from the survey include:
31% have reported above inflation rises in their energy tariff
27% have received large bills for alleged ‘underpaying’ of energy (backbilling)
28% felt that there was a lack of clear help and guidance on suitable energy tariffs
32% have had their contract automatically ‘rolled over’
The research comes after Deputy Prime Minister Nick Clegg last month announced a landmark deal to require energy companies to inform consumers of the best tariff available to them on an annual basis. The measures however do not apply to the non-domestic market. Of those polled, 88% believed that further regulation of suppliers was necessary for a fair marketplace.
Over recent years, ACS has been at the heart of talks with Ofgem campaigning for a fairer marketplace for business customers. After ACS’ submission to the Retail Market Review in 2011, Ofgem have taken action to stop some practices but have yet to deal with issues like backbilling. This issue remains subject to a process whereby the energy companies have committed to drawing up a new code of practice but it is yet to emerge after a year of negotiations.
Lowman addded: “The measures we are calling for are already in place for the general public. We are simply calling for a single industry standard to stop the abusive practices of energy companies.”