Energy supplier E.ON is to end automatic roll-over contracts for its SME customers, making it the second of the UK’s “Big Six” suppliers to call a halt to the practice.
The decision was prompted by a survey of E.ON’s customers which found that they would prefer to negotiate a new fixed price contract or be placed onto a variable rate at the end of their existing term, rather than the current industry practice of being rolled onto a new long-term contract – a system considered unfair by some in the industry.
The news comes several weeks after British Gas announced that it would be ending automatic roll-over contracts for all its business customers, in recognition of the fact that many customers were unhappy with being put on a long-term contract without negotiation.
At the time, E.ON said it would only consider stopping the practice if its other competitors – Scottish Power, EDF, SSE and npower – led the way.
But, in an apparent U-turn, all of E.ON’s SME customers will be offered the opportunity to negotiate a new contract at the end of their term from April 1st, while new fixed-term products without an auto-rollover option will also be launched for both existing and new customers.
Between now and April, E.ON will remind and encourage its existing SME customers on fixed term contracts to opt out of being automatically rolled over.
Customers who choose not to take a new fixed term contract once their existing contract expires will be moved onto E.ON’s cheapest variable rate tariff, which includes a 30 day notice period and no exit fee. The renewal window is also being extended from 90 days prior to the contracts’ end, to 30 days.
And, from October, E.ON will publish all variable SME tariff rates on its website, allowing its customers to compare the rates available to them.
“We know from our own business customer panel and from independent research that the majority of small businesses just don’t like the automatic rollover process and find it too complex,” said Anthony Ainsworth, sales and marketing director of E.ON UK. “So, we’re making it clear for our customers; at the end of your contract you can either renegotiate a new deal or we will move you on to our cheapest variable rate product.”
“In addition, having listened to customer feedback we are extending the time for customers to negotiate a new deal to 30 days ahead of their current contract end date, allowing them even more time to ensure they can find the best deal for them.”
However, the end of automatic roll-over will only apply to E.ON’s SME customers, and not its whole business portfolio.