Energy companies now dumping small business customers?

[gloomygoblin]

Recently received a renewal notice for the electricity supply for my small business from SSE. This stated that I would need to pay 19 weeks supply charges up front, and may also have to pay increased unit cost charges. SSE claimed that the reasons for this was due to my failing a credit check, but when I contacted them on the phone they were unable to outline the reasons for my failing, or to explain why I had passed the 3 previous checks with no problems (all since reference checks started).

 

This seemed to like SSE clawing extra profits out of hard bitten small business customers, and in my case the fact they had been providing me with electricity for 13 years, with no issues related to payments, did I felt have some bearing on the situation. Over the course of a couple of days I spoke to several SSE droids about this situation, with one of them claiming that charging deposits, and increased unit costs did not result in higher profits!

 

A customer of mine works in an executive position in one of the smaller energy companies, and I discussed this with him. It would seem companies such as SSE are dumping higher risk small business customers, by far more stringent credit checks, which mean customers either pay the deposits required, and in some cases unit cost increases of up to 30% higher. The reason for the use of this strategy, is down to the fact they cannot lawfully refuse to supply a customer, so are encouraging them to go elsewhere using the method outlined above.

 

I wonder have any other forum members running small businesses got one of these notices? Seems to me that the greed of these people is astonishing, and bearing in mind the current economic situation, and the enormous profits the energy co's posted last year, that the press might be interested in what seems to me an obvious way of sidestepping the law, to ensure even higher profits?

[45002]

Don,t know much about small business suppliers,but i would find another supplier if your not under contract with SSE...

[nottslad]

Most, if not all suppliers now credit check upon application and renewal. They obtain information from CRAs and then apply their own internal credit score. The SME market is actually growing and can be very lucrative.

 

It could well be that SSE's internal scoring has caused them to decline to contract, based on their own assessment of the risk e.g. they may have experienced a high level of insolvency with similar businesses and therefore deem you as a risk.

 

As you mention, a supplier cannot refuse to supply you when they already supply you, but they can lawfully impose conditions such as a deposit, cross or parent company guarantees or even director undertakings before entering in to a contract. They therefore continue to bill you on deemed rates on an extended supply contract. These rates are 99% of the time higher than contracted rates and of course they are more profitable.

 

As they are basing their decision on a credit check, there should be some form of appeals process in place; it might be worth speaking with their credit risk team (if you want to stay with them after this)

[gloomygoblin]

In this case SSE has advised they have no particular criteria in respect of credit scoring, and have seemingly decided to dump me as a customer on an arbitrary basis. I wonder if I have any right to apply under FOI for the reasons as to why I have been refused?

[nottslad]

It wouldn't be freedom of information, it would be DPA, and they would charge you for that.

 

If they have no particular criteria for scoring then why bother doing a credit score! I think whoever you spoke to possibly lost their script lol!

[gloomygoblin]

They have changed their minds now, and have forgotten about the "security deposit" and credit scoring, and offered me a lower unit cost! When I suggested this was purely and simply due to my kicking up a bit of fuss, there wasnt much they could say to deny this.

 

Unfortunately this sort of bullying is becoming more and more common, and I would guess that for every 10 people that object there are probably 50 that dont! The profits these people make are already enormous, and I feel that kicking small business customers in the balls, through telling lies over non existent credit checks is something that deserves publicity.

[nottslad]

Completely agree with you on that one! It might be worth writing to the business section of a couple of papers?

[gloomygoblin]

The MSM is unlikely to be interested, as they seem to me to work hand in hand with the business interests which are ripping us off.................

[Surfer01]

I can understand why SSE are not taking on new business customers as most new businesses fail within the 1st year leaving huge debts to utility companies and have caused some of the smaller energy companies to go under.

However if you are already with a supplier, they cannot force you to change suppliers unless at renewal time they hike up their prices unreasonably. That is where some unscrupulous companies step in and start ripping off the business owners. A quick search on CAG will highlight these rogues.

[gloomygoblin]

In this case I have been an SSE customer for 13 years, with no problems at all. As I understand it they are wanting to dump small business customers (which they see as high risk), by asking for security deposits and higher charges, simply as a ploy to be able to do this lawfully. I have asked them about dumping small business customers (which they deny), and have suggested that if they cannot clarify the exact reasons they want to charge a deposit and higher unit costs, that my feelings about dumping are quite correct.