Dispute with British Gas Business, advice needed

[PublicanPaul]

Hello

 

My business, a pub company, had been a customer of British Gas for 8 years for both electricity and gas.

 

As both these contracts were due to end in January 2017

I agreed terms and rates to renew with British Gas once again through my broker.

 

For reasons that are unclear to me British Gas declined to honour the agreed terms at the last minute and forced me to find an alternative supplier.

 

My broker suggested it was because my business had no trading history, which is absurd as I have been trading since 2009 and have been with BG for the entire time.

 

I then started to receive a series of 'final' bills from BG.

The first set of bills, for both electricity and gas, were for the period up to 30th January 2017

- my contract end date. The rates applied to these bills were as expected and the consumption was inline with previous years and were duly paid.

 

I then received a second set of 'final' bills,

with new account numbers, up to the 28th Feb 2017 for electricity and up to 9th March 2017 for gas.

 

My rates had changed to 'out of contract' rates and my consumption had supposedly more than tripled compared to previous years.

 

As a pub our electricity consumption barely changes from one month to the next, it powers the lights, fridges and freezers, and is pretty consistent.

 

The gas powers the ovens in the kitchen, the central heating and hot water and can go up in the winter months. But considering February and March weren't particularly cold this year the increase in consumption that BG are claiming is hard to believe.

 

The upshot of it all is that I now have outstanding 'final' invoices from BG for approx. £7,000, instead of the £2,500 that I might have expected. Added to which, the rates I was able to negotiate with my new supplier at the last minute are significantly worse than I had agreed with BG.

 

I have refused to pay these invoices and believe that the consumption BG are claiming is wrong.

I also think that they should honour the rates we had agreed for the new contract on these last bills rather than apply 'out of contract' rates.

 

They have chosen to pass the accounts to Debt Collection companies,

claiming I have made no attempt to resolve the issue,

which is not true.

 

Instead BG are choosing to ignore my complaints.

 

Should I continue to fight this and if so, how ?

 

Any advice would be greatly appreciated.

[dx100uk]

get the readings and check

 

sadly they are quite entitled to charge their out of contract rate.

 

you left it rather late to sort this out too?

 

dx

[BankFodder]

I think that this story raises some very interesting issues and I'd be keen to explore them with you.

 

My starting position here is that all the utilities companies use a system of "deemed contracts" when dealing with out-of-contract situations. We normally come across this with consumers who have moved into new properties and haven't set up their utility contracts yet – but it happens with businesses as well.

 

A deemed contract is an industry practice which apparently allows the energy supplier's to apply whatever terms they want to their new customer until that customer has formally entered into a more advantageous contract. Of course, the terms of a deemed contract are extremely advantageous to the supplier. I have always thought that these are extremely unfair and unenforceable. It has been a long-standing principle under sale of goods legislation that where two parties enter into an agreement and no price has been fixed, then "a reasonable price" will be implied. The principle of deemed contracts has never been challenged so far as I know – and it should be because I think that it is unlawful.

 

I see a similar kind of principle of deemed contracts operating here.

 

I'd like to know more about the story.

 

So far as I understand, you have had a successful series of contracts with British Gas for eight years on certain terms. You have been negotiating British Gas for a renewal but suddenly they have refused to continue with you and you don't understand why.

 

As a result, they have put you on to some "deemed contract" which of course is at their most punitive rate.

 

I think that they are probably acting unlawfully and I think that this could be open to challenge.

 

Separately I would like to know at what point they suddenly decided not to contract with you. You are apparently doing this through a broker. How does that work? Why do you do this?

 

Could you give me a little chronological detail as to when you began the negotiation and how close it was to the termination date of your existing arrangement, that British Gas suddenly decided not to supply you any more.

[PublicanPaul]

As I understand it all business energy contracts are listed on a database which is accessible to energy brokers and utility companies. As you approach the end of your contract you start to get inundated with calls, mainly from brokers, offering to negotiate new deals for you. Whether they do actually negotiate deals or just have cosy arrangements with their 'favourite' companies who give them the best commission is open to question. Nonetheless it takes the leg work out of searching for deals and you can play one broker off against another to try and get a good deal.

 

This process started in June 2016 and I agreed prices with British Gas, via a broker called Utilitywise, in July 2016. I have a confirmation letter from Utilitywise dated 21/07/16. In November 2016 I received a letter directly from British Gas saying I needed to agree new terms immediately otherwise I would be moved onto 'variable' rates in January 2017. I forwarded this to my broker querying why I had received this letter as we had already agreed new contracts. They assured me this must be an error as contracts were in place. I didn't receive any other warning letters so thought the issue was indeed resolved.

 

Then in January 2017, around the middle of the month, my broker came back to me and said BG had refused to honour our agreement as my company had no trading history! I obviously said this was nonsense but he confirmed BG weren't prepared to go ahead and we would have to find a new supplier. As of the end of January 2017 I was moved onto 'out of contract' rates even though we had agreed new deals with SSE, but apparently these could not go live until March 2017 because BG insisted on 30 days notice.

 

Then low and behold throughout February and early March, while 'out of contract' my consumption apparently tripled compared to the same months in previous years! As I have stated previously our electricity usage does not vary much and our gas usage can go up if the weather is particularly cold, but it wasn't this year.

 

I have tried both through my broker and by directly emailing BG to try and resolve these issues but I'm being ignored. BG have now passed both my electricity and gas accounts to debt collectors, claiming I have made no attempt to resolve the issue. By which they mean I've made no attempt to pay.

 

What can I do ?

Cheers, Paul.

[BankFodder]

So it seems that the issues here are that you may have agreed a contract in June 2016 – and if that's the case then British Gas may be in breach of that contract. If it turns out that there was no contract, and you have been placed on a "deemed" variable rate contract – at the most advantageous rate to British Gas (is that correct?). Is this huge bill the result of similar consumption to before but at the new rate? Or is it due to apparently increase consumption?

 

What correspondence have you got showing that prices were agreed? What evidence is there that a contract was in place as assured by your broker?

 

Also, I don't understand that British Gas said that your company had no trading history and yet they had previously given you a contract and in fact they wanted 30 days notice of the termination of that contract.

 

Do I understand that you are being ignored by your broker as well? Did you have any written agreement with your broker?

[PublicanPaul]

Hi

 

I have a letter from by broker confirming the prices and length of contract agreed with BG. I then went through a process whereby you agree contract terms over the phone, a verbal contract if you will, which is presumably recorded. Following that I received another email from my broker confirming that I have 'placed my energy contract through Utilitywise' and they attached a 'terms and conditions for SME's' from BG. At no point did I receive a physical contract from BG. I have a copy of the 'Letter of Authority' that I signed and agreed with my broker allowing them to act on my behalf.

 

I had some initial success communicating with BG who said they would investigate but they then passed me around different departments, customer service, resolutions department, finance etc etc. I have an open ticket with the customer services department and they asked me to provide all the different account numbers that relate to this issue. Having provided those on the 30th May I have had no further success in getting a response from BG despite follow up emails on the 8th and 14th June.

 

My broker tells me that he has spoken with BG and they have told him they believe the reads are correct and that I should pay. But as I am technically no longer a customer of BG my broker is no longer authorised to act on my behalf. Meaning he can wash his hands of the issue and I'm on my own.

 

As for the trading history issue. The only thing I can think off that might have caused some confusion is that my old invoices from BG were addressed to the pub (ie our trading name), whereas the new (final) ones received in February 2017 were addressed to my company. I'm not sure why this would be an issue as the contract signed in 2013, that expired in January 2017, was addressed and agreed with the company. And I have copies of those contracts from BG.

[BankFodder]

Please will you publish the letter here in PDF format. Also I suggest you read our customer services guide and having implemented the advice there that you call British Gas and see how much you can get them to admit over the phone. It may be able to get some useful information there.

 

Also, what would be the difference in the bill if the consumption which they claim had been charged at your normal contract rate?

[PublicanPaul]

Confirmation of prices letters:

 

If my last bills had been charged at my contracted rates electricity would be about £1,500 instead of £3,000 and gas would be about £1,500 instead of £4,000.

Confirmation email from Utilitywise.pdf

Pricing Agreement.pdf

[BankFodder]

Thanks for this.

 

I haven't noticed anywhere that it says that any contract has been agreed with British Gas in fact the documents that you have put up seem to be a list of possible prices and at some point it says that an agreement has to be signed with British Gas.

 

I'm not trying to criticise you – but I think we have to be very careful about this and we have to understand it all in great detail if we want to stand any chance of making headway.

 

In terms of your £1500 for gas and £1500 for electricity, had you been on the contractual rate, how does this compare with last year's bills?

[PublicanPaul]

I agree it seems strange, but the verbal contract is supposidly binding. At least that is what you are told during the phone conversation. You are also told that having agreed terms you are not supposed to engage any other service provider. Having said that I have always received a subsequent physical contract from my energy provider eventually, but this arrives long after you have verbally agreed terms. This did not happen in this instance. Maybe I should request a copy of the verbal cotract ?

 

Last year my combined gas and electricty for the whole of Feb was £2100 and the whole of March £2400. This year they are charging me a combined figure of just over £7000 for the whole of Feb and 9 days of March.

[BankFodder]

Yes, a contract is binding. No problem about that. However, do you have evidence that there is a contract? Do you have evidence that a contract was agreed on the telephone?

 

Because you are typical of most businesses and most people, you have all sorts of conversations – very important conversations – with people and businesses on the telephone and you have absolutely no record that those conversations ever happened. Very often there is no problem but when there is a problem, then you find yourself in a position where it is your word against theirs and I'm afraid that if it comes to a court case (as it might easily do here) you won't have enough evidence to support your argument and to win your case.

 

So, what evidence do you have that there was any contract? On what you have shown so far, I haven't seen anything.