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Hi,

 

I have a question regarding 'Deemed Contracts'.

 

In 2008 I moved into a new apartment that received Gas and Electricity from E.on. On the day that I moved in I contacted Scottish Power and asked them to provide Gas and Electricity, agreed that I would be on the same dual-fuel tariff as the previous property (not the same account, but the same tariff), and provided the appropriate meter readings.

 

Subsequently there have been a plethora of complete cock-ups by Scottish Power, but there fundamental argument is that when I initially called them the tariff I requested (and they agreed to) was no longer available. However, they still transferred the utilities.

 

Scottish Power stipulate that the amount owed has been calculated based on the 'deemed contract' that was enforced when no contract was in place. I am challenging the assertion that a deemed contract was in place on the grounds that Scottish Power made as they were not an 'appropriate supplier' in that they had no agreed terms and conditions on which to transfer the utilities.

 

Moreover, since 2008, there has been no mention or reference to a 'deemed contract', none of the invoices have stipulated the account was being invoice under those terms and conditions and they have only brought it up recently as I have begin to challenge their contractual rights.

 

Utility companies seem to want to use the 'deemed contract' clause within the utilities act as a complete safety net to their contractual obligations...

 

Any thoughts or advice would be much appreciated.

 

Thanks in advance.

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In this instance the best way forward may be to issue a letter to Scottish Power requesting for a Subject Access Request under the Data Protection Act. Ensure you ask for the account information relating to both your old and current address.

 

This would provide you with concrete evidence of what tariff was quoted to you.

 

A deemed contract subsequent to Schedule 6, paragraph 3.1 of the Utilities Act basically states that if a company is supplying a property, they continue to supply it until someone else takes over the supply and the supplier is deemed to have contracted with "the occupier" of the property or the owner of the property should it be vacant. It basically eliminates the argument that has often been made of "I'm not paying as I haven't signed a contract."

 

The bills sent to you should have stated what tariff you were being charged and the rates you were being charged, also if there were any price changes during the period of time that the account covers you should have also received letters confirming the details of any price changes. Following you contacting Scottish Power originally, a welcome letter should have been sent to you confirming the terms you were being offered, the SAR will include this when it is sent through.

 

Following requesting the transfer there is a 14 day cooling off period if you are not happy with the terms they have offered. If the welcome letter shows the deal that you had at your previous address, this should be honoured and you have good grounds for a complaint. If the welcome letter shows the rates that you have been charged then the complaint is perhaps a bit weaker on the grounds that you were expressly advised in writing what deal you would receive.

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Hi Nottslad - thanks for the prompt reply.

 

I will certainly ask SP to provide any documentation and invoices that they have collated regarding this account. Fortunately we transferred the account away from SP in December 2009 (we were able to do this because, by this point, SP had already conceded they were at fault) whilst at the previous property, and so it is completely independent of our current property.

 

My understanding, I've done some reading this evening, on deemed contracts is that (according to OFGEM) they exist to ensure continuity of supply for the consumer - either at the start of a tenancy or ownership, or at the conclusion of a fixed-term contract. For the supplier it removes the requirement to perform thousands of disconnects and reconnects this year.

 

The crux of the question is should SP taken over the supply without a valid agreement in place? Previous conversations with SP lead me to conclude that they have no documentation that suggests an agreement was reached in August 2008. However, SP want both slices of the cake in this situation; they want me to believe that they can infer a 'deemed contract' exists from their taking over the supply in August 2008, but can not supply any evidence that I entered into an agreement with them that would facilitate their taking over the supply... Moreover SP have never even mentioned the words 'deemed contract' (let alone provided any terms) until they were mentioned, in passing, by a DCA they've had chasing the case recently. I know for a fact that none of the invoicing has ever stated this, or cited this in the array of tariffs that they have chosen to apply (none of which I've actually agreed to).

 

Of course, when all this shakes down, just two numbers matter - the number of units and the cost per unit - it's just a shame SP can't provide any coherence on either.

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To be honest with you, most energy supplies are now on a "deemed contract". A deemed contract in summary is a default agreement that exists that binds the person using the energy to the suppliers terms and conditions. In several years in the energy industry, I have never seen a domestic account on anything other than a "deemed contract".

 

The alternative to a "deemed contract" is an express written agreement, formulated in the way that any other contract is, specifically stating prices and terms and conditions separate to the standard terms. It sounds as if the DCA is getting a bit confused and has been given a list of things to say when people query the validity of the balance and picked out the deemed contract blurb as a response.

 

How long was the supply with Scottish Power? I presume that you made payments to them for some of the charges as if the supply changed over to them in august 08 there would have been correspondence sent from both scottish and eon around the transfer, if you didn't want this to go ahead then it could have been stopped, or, if the cooling-off period had been exceeded the supply sent back as an Erroneous Transfer, so the argument there isn't the strongest point.

 

The best approach I think that you could have to this is that you were wrongly advised prices by the agent and that your contract should have been carried over from the old property to the new property as you requested. In requesting for the contract to be transferred it was your understanding that it would be at the same rates as you were charged previously etc.

 

The reason I say about making sure that in your letter of Subject Access Request you state both addresses is in case notes regarding the transfer are on one account but not the other, Scottish Power may not automatically search for accounts with reference numbers or addresses different to what you tell them, so by being quite prescriptive in what you want is the only way forward.

 

Send this letter recorded delivery and also stipulate that the debt is formally in dispute and you expect all debt collection action to be stopped until a mutually agreeable resolution has been reached in line with the OFT guidance on debt collection

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Hi,

 

My understanding is that 99% of energy accounts are managed as regular contracts, as the consumer has agreed specific terms and conditions when they chose their tariffs (which are usually accompanied with specific terms and conditions in relation to consumption, contract periods, termination fees etc.). Those consumers on Deemed contracts are normally using a supplier that they have not entered into an agreement with, either because they haven't yet had the opportunity to agree terms (new tenancies / ownership) or suppliers of last resort. Deemed contract terms and rates are uncompetitive (expensive) versus terms offered by either the same or other providers and so it is in the consumers interest to move away from a deemed contract to a regular contract at the earliest opportunity.

 

The energy was with E.on (on a deemed contract) when we moved into the property on 25th July 2008. I contacted Scottish Power in the first week of August 2008 and asked them to provide both Gas and Electricity. It is important to note I didn't ask them to transfer the account from the old property - this can not be done (but is one of the main defences SP have tried to use, although I have clearly stated on all correspondence that I didn't ask them - at any point, to do this). What I asked them to do was use the same tariff that I had at my previous property at my new property, on the new accounts. The energy was transferred away from SP on December 2009, and so was with them for 17 months.

 

As you've probably guessed, I have several gripes with SP, the main one being that I don't see how they can argue that they didn't agree to the terms in August 2008 but still believe they had legitimate grounds to transfer the power away from E.on. Surely, when they realised they weren't able to honour their agreement they should have contacted me to renegotiate, and stopped the transfer process until an agreement was reached. Instead what they did was transfer the supply anyway, and commence to supply energy on terms that were not agreed. SP can't provide any evidence that an agreement exists for August 2008, but this also means they had no legitimate claim to supply the power and therefore can't be considered as the appropriate supplier (as they had not supplied the power previously) under the Utilities Act 2000.

 

I think I'm going mad...

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Hi mcjohnson

 

I understand your situation and would like to clarify a few areas for you and confirm the process that your account would have gone through.

 

Firstly, the deemed contract issue that is commonly discuss, does not really fit in with your situation. A deemed contract is often argued about when a customer moves into a specific address and then wants to be supplied by a specific supplier. When the customer finds out that they need to set up an account wih the current supplier of the property when they move in, this often leads to arguments from the customer saying they do not want an account with that supplier and want to be supplied by XYZ. Under the terms and conditions of the deemed contract, the customer is responsible for paying the current supplier of the gas/electricity from the date they took responsibility for the property until such time that another supplier takes over.

 

Your issue is not relating to a deemed contract and is more to do with the terms and conditions that you agreed to with ScottishPower when you wanted the gas and electricity supplied by us. Like nottslad has mentioned, if you make an agreement with ScottishPower to supply you for the gas and electricity the details of this agreement will be held in our database and you will have been given an agreement number. Shortly after this agreement was processed, you will have been issued with a welcome pack confirming the terms and conditions of your tariff. You have 7 days from the date of receiving this welcome pack, to review it and contact us if you are unhappy with any aspect of it. If you do not contact us within this time then the transfer process will go ahead and your account will be created within 4 to 6 weeks.

 

From what you have posted, we are normally unable to place you onto the same tariffs as you were being billed at your previous address, unless this tariff is still being offered by us when you make the transfer request. If you were previously on an old capped, discounted tariff, then our billing system will not be able to place you onto this tariff now.

 

We can certainly investigate the account for you and confirm what information we hold regarding your transfer agreement in 2008. If errors have been made then we can certainly address these for you. If you have not already contacted us then I would recommend speaking with us and getting all the information you require. Have a look at the link below to confirm our internal complaints procedure:

 

http://www.scottishpower.co.uk/support-centre/service-and-standards/complaints.aspx

 

If you have any further questions please do not hesitate to ask and I will do my very best to help.

 

Kind Regards

 

Colin @ ScottishPower

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Hi Colin,

 

The problem is that when I first contacted SP, in August 2008 I was very specific in my request, in that I wanted to utilise exactly the same tariff (a dual fuel tariff) that I had at my previous property. SP agent agreed to this, but then I was only billed for electricity. When I queried this, initially in Sept, SP agent said that only electricity had been transferred, and was being billed at the standard rate. I again asked for gas as well, and for the account to be rebilled based on the agreed tariff. Again weeks passed with no word from SP, so I phoned them again in Oct 2008. No action had been taken, following my previous telephone call, to transfer the gas. AGAIN I asked for the gas to be transferred, and for the account to be re-billed as per the agreed tariff.

 

At that point, the SP representative advised that the tariff in question was no longer on sale, and that I would have to chose a different tariff. I said I didn't want a different tariff, I wanted the tariff which the SP agent agreed to back in August when the supply was transferred.

 

Subsequently SP have refused to honour this initial agreement and, somewhat inconveniently for me but very conveniently for SP, they don't have a recording or transcript of that particular conversation! But they, apparently, have plenty of others - just not the one that proves my case....

 

Anyhow they have subsequently referred my account to a debt collection agency, from whom I received a letter the other day (in response to a letter that I sent them), which advised that SP considered my account to be a 'deemed contract'. For me this is complete nonsense, and I have studied contract law at postgraduate level so I can read a document, such as the Utilities Act 2000 and know exactly what both the letter and the spirit of the law mean.

 

The simple fact of the matter is that SP took over the supply without an agreement in place. They had no right to take over the supply such an agreement, and consequentially do not hold the status of an 'appropriate supplier' which would afford them the right to claim a 'deemed contract'

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