Essent’s end-of-contract charges could be illegal, says ministry
by Alan Hope,
Summary
The
federal economy ministry is looking into electricity provider Essent’s
practice of charging customers for a year of service regardless of when
they cancel their contractsPay up
Energy companies that
bill customers who leave for another provider could face fines, the
economy ministry has warned. Last week it was revealed that one
electricity provider, Essent, was sending invoices to customers who
terminated their contract to sign up with another provider.
Since
2012, customers in Belgium have the right to change providers without
penalty. Similar end-of-contract charges were seen as an impediment to
changing providers and therefore a barrier to free competition.
“Our investigation is still under way, but if it turns out that in fact the energy companies are carrying out practices that are now allowed, then they could face fines of several thousand euros, or in the worst case could be referred to the prosecutor’s office,” economy ministry spokesperson Johan Verbelen told VTM News.
The bill sent to customers is based on an entire year, regardless of when they cancelled their contract. Essent considers this a minimum charge, CEO Frank Brichau said, justified by the fixed costs the company is faced with under the regulations. Other companies, however, say they do not operate under such a system.
Since December, Essent has also applied an increased fixed charge, up from €75 to €120 for gas and electricity together. For the variable tariff the price went up from €60 to €120, while at the same time the price per kilowatt hour decreased.
Customers who leave part-way through the year are also being charged a full year’s fixed charge, which the 2012 changes to the law were intended to prevent, consumer protection organisation Test-Aankoop said.
Photo courtesy EssentNieuws/Wikimedia
“Our investigation is still under way, but if it turns out that in fact the energy companies are carrying out practices that are now allowed, then they could face fines of several thousand euros, or in the worst case could be referred to the prosecutor’s office,” economy ministry spokesperson Johan Verbelen told VTM News.
The bill sent to customers is based on an entire year, regardless of when they cancelled their contract. Essent considers this a minimum charge, CEO Frank Brichau said, justified by the fixed costs the company is faced with under the regulations. Other companies, however, say they do not operate under such a system.
Since December, Essent has also applied an increased fixed charge, up from €75 to €120 for gas and electricity together. For the variable tariff the price went up from €60 to €120, while at the same time the price per kilowatt hour decreased.
Customers who leave part-way through the year are also being charged a full year’s fixed charge, which the 2012 changes to the law were intended to prevent, consumer protection organisation Test-Aankoop said.
Photo courtesy EssentNieuws/Wikimedia
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