I received a letter from Atlantic Electric & Gas on the 18th October, dated October 2008 saying that they were increasing their prices from August 2008. Can they backdate price increases? If they had informed me before the price increase I would have a choice to change suppliers.

Erm no, they absolutely can not. Give them a bell. If they insist that they can, then contact your local department of trading standards.

Erm, yes, they specifically may do so.

You do have the choice to switch to another supplier if you wish. Inform them within ten days that you reject the new contract and apply to a new supplier to switch. They will then honour the previous price.

This is done so that all the transfers and complaints that are triggered by the new prices are spread out over the usual quarterly cycle rather than the couple of days after the increase. You gain from this policy and can receive anything up to four and a half months supply at the old cost.

Hi Shiverkitten,

There must be something wrong with my maths.

If somebody writes to me in October and tells me that they're putting up my bill effective the August that's just gone, that seems like minus two months at the old price, not an extra four and a half months.

Can you possibly provide a worked example for the sake of the unenlightened?

Cheers,

They can backdate 65 working days which is slightly less than three months with weekends. You then have 10 days after the notification of the contract change to tell them you want to switch and a further 15 days for the new company to initiate that switch. So that's 85+10+15 or 110 days so that's three and two third months. Then there's the follow on time for the switch to actually take place.

Of course, not everyone receives this full period - it varies over where in your quarterly cycle the price change takes place. Hence my use of the phrase 'anything up to'. In the OP's case it's two and a half months and up.

I'm so sorry, I still can't work this out.

To my mind, this is how it works:

Scenario A - no price rise, £10 per month billing

August £10

Sept £10

Oct £10

Nov £10

Dec £10

Total £50

Scenario B - price rise in Oct, not backdated, increase to £20 per month.

August £10

Sept £10

Oct £20

Nov £20

Dec £20

Total £80

Scenario C - informed about August price rise in Oct, as before, increase to £10 per month:

Aug £10

Sep £10

Oct £40 (£20 for Oct plus £10 extra for Aug, Sept)

Nov £20

Dec £20

Total £100

So in the original scenario where there was no price rise, then for the rest of the year, £50 was paid.

In the second scenario where there was a price rise but it was not backdated, £80 was paid

In the third scenario, where the price rise was backdated, £100 is paid.

How is that cheaper? What am I missing?

<edit - I'm not trying to be awkward or anything - I really want to understand how backdating a price increase helps customers!>

You are comparing three different things. With A there is no rise; B there is a rise in Oct; C the rise is in Aug.

Scenario A - there is no price increase. Everyone pays the correct £50.

Scenario B - the price increase is 1 Oct. Everyone is told 1 Oct. Everyone pays the correct £80

Scenario C1 - the price increase is 1 Aug. Everyone is told 1 Aug. Everyone pays £100

Scenario C2 (our world) - the price increase is 1 Aug. If your bill falls 1 Oct, you are told 1 Oct. If you stay, you pay the standard new price which everyone else pays, £100. If you switch, you pay the pre increase price of only £10 per month until the switch goes through. Say the switch completes 1 Dec. Then you have only paid £40 for Aug-Nov instead of £80 (plus £20 for Dec with the new company.)

There is an opportunity for some customers who choose to switch to pay the pre-increase price over the time between the date of the increase and the date the switch goes through. It does not help customers who stick with the company, but it does help those who switch.

Yes - that's exactly what I mean and that's why it is so fundamentally wrong.

Let's say I agree to provide you with a service at say £10 per month.

You agree to take it, you pay me £10 per month and everybody is happy.

If I then came back and said, "well gov'nr I've just put the prices up, effective a few months ago, so even though I didn't tell you and we had agreed a price you now owe me more money", you would be unhappy and probably contact the department of trading standards.

Let's face it if you went into Sainsburys tomorrow and they decided that they were going to put the prices up from last August and all the food you'd already bought at the advertised price and eaten you now owed more money on, you would be cross.

So why is this acceptable practice for the electricity companies?

mr-tom,

I totally agree with you and I'm very annoyed. How dare they !!! I'm switching right now - out of principle if nothing else !!

Cheers.

… to a company that follows the same practice.

I'd encourage you to write to them and send a copy to the regulator as this sort of thing really is unethical and must be addressed, but the problem is I have a fair idea what sort of response you'll get.

I called Atlantic today on this subject and refused to accept the increase to the fuel I have used to date. I notice my bill last week included fuel at the new rate from August 25th.

The lady told me that they are required to give 64 days notice of any increase and they have not been able to do so due to the millions of customers and letters required.

She has told me to take meter readings now, and that any energy already used will be charged at the old rate. !! (bet if I hadn't asked, they would not have offered)

So...I will take meter readings tomorrow and give them another ring - THEN I will ask for the 64 days notice of price increase and do another reading in 64 days - worth a try I suppose.

As a minimum, the Aug increase will only be applied from now onwards. At best, they will not apply the new rates until Dec (64 days from notification) at which point I have the choise to change supplier.

Brrrrrrrrrrrrr........its going to be a cold winter.

I have to back shiverkitten up here as all companies will do exactly the same thing.

Mr Tom,

It doesn't really matter if you like it, although I do agree it provides more benefit to those who switch, than those who stay loyal, but you really are missing the point

The 65 working day rule has been given to the suppliers by Ofgem (IE the regulator), and the measures they put in place along side that (10 days, change supplier, final bill at old rates) protect you from the increase and give the choice if you want to switch and avoid the rise.

Pre Aug 2007, you only needed to get 10 days notice and there was no "switching to avoid it" thing then, and you didn't have time to do it on your own. you would have had to pay at least some of a bill at the new prices.

I understand your upset cause you've found out later, but you can avoid the increase altogether this way, and if you weren't going to switch because of it.. what does it matter?

Mavis,

you seem to have been lucky anyway with the girl you spoke to as she clearly cant count, as 65 working days from 25 August hasn't passed yet. And I think I know what the answer to your idea for tomorrow will be.. second word "off"

OK, then. So I've had this letter too and I'm pretty cross and, like others, want to switch. But how can I switch when the comparison websites haven't factored Atlantic's price increases into their figures yet? Atlantic keep coming out on top!

I can't afford to wait for them to catch up if I only have a few days to set up a switch ... ?

My point was that Atlantic suggested to me that the 64 days was notice they needed to give customers before they could raise prices - not a period they could backdate rises.

I cant find anywhere the regulators rules for these notificaion periods so a link would be appreciated.