Fixed power contract? Beware of the cancellation penalty if you start living together

Fixed power contract?  Beware of the cancellation penalty if you start living together

If you want to get a permanent electricity and gas contract, how long will you do it for? From June 1, it is wiser to think about this more than before.

Living together or traveling abroad

It could be very expensive in 2 1/2 weeks if you cancel your fixed power contract.

Will you live together or will you move abroad after a while? Then you can already take that into account.

Pay the price difference

At the moment it is still the case, if you want to get rid of your permanent contract for gas and electricity, this costs 100 euros as standard: 50 euros for the gas contract and another 50 euros for the electricity contract.

But as of June 1st, it can get a lot more expensive. You will then have to pay the difference between the price you agreed to in your existing electricity and gas contract and the (new) rate that applies at the time you want to terminate your current contract.

Damage compensation

If this new price is lower (which it will be anyway when you switch to another provider), it will be a blow to your energy provider. After all, he has already bought energy and electricity and gas cannot be transferred to you. Another new customer may want to purchase that energy, but at a lower price that applies at the time.

To ensure that your old power supply does not suffer any damage, the customer will soon have to pay the price difference. In fact, this is a bit like interest for penalties if you opened your mortgage with a lower interest rate in the meantime.

In most cases, the cancellation fee will be much higher than the €50 you currently pay per contract (electricity or gas).

Fourteen days reflection period

The cancellation fee was supposed to start on January 1, 2023, but this was moved to April 1 and then to June 1.

You will see the penalty amount upfront upon cancellation. You then have fourteen days to consider whether to proceed with the cancellation.

More offers for permanent contracts?

It is expected that after June 1, energy suppliers will readily offer power contracts of more than one year due to the penalty of cancellation. After all, suppliers run less financial risk than letting customers in the meantime leave them with expensive purchased energy.

Edwin van Houten, ACM’s consumer director, thinks suppliers may start offering five-year contracts again.

Beware of misleading service providers

“Unsolicited, deceptive, and aggressive hiring practices, and also from energy suppliers themselves, whether they are about to happen or not,” warns Edwin Van Houten, because consumers are not being properly informed.

According to Van Houten, recruiting new clients is now attractive. If, as a consumer, you still want to cancel the contract after the fourteen day cooling off period, you’re too late and stuck with that supplier for the life of the contract.

According to Van Houten, service providers use “all kinds of excuses to convince people of a bad deal, to mislead them.” So his advice is: “Never agree over the phone and before you agree with your new energy supplier, check with your existing supplier what the switching cost is if you have a permanent contract. Then you can consider if the offer is really as good as it sounds.”

In this video, you can see how most consumers’ energy bills may not come down as quickly as you would expect them to:

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