Small firms complain over utility contracts

A third (35 per cent) of small businesses do not know when their utility contracts end and 31 per cent do not begin to consider the renewal until they get a letter from their current providers with the rest of the market.

That was the result of research from the Forum of Private Business.

The group said that a third of business owners surveyed by the Forum describe standards of customer service as ‘poor’ or ‘very poor’. Many cite contractual issues – including the practice of rolling businesses over on to often more expensive contracts with little warning.

Just 11% can understand their utilities contracts, 35 per cent think it is difficult to switch suppliers and 40 per cent feel that contractual terms and conditions are ‘poor’ or ‘very poor’. Almost half of all respondents (47%) are concerned that utilities costs are too steep.

“There must be better protection to stop the erosion of service provided by utilities companies to commercial customers, particularly after the demise of Energy Watch and then Consumer Focus,” said the Forum’s chief executive Phil Orford. “Ofgem does not have the necessary powers to protect all small businesses and, unless we establish proper levels of service and transparency which allow them to make informed choices, they will continue to suffer at the hands of utilities providers.”

He added: “At the very least protections that have been introduced for micro businesses should apply to all small businesses. There is absolutely no evidence that SMEs with more than 10 employees are better equipped to handle issues with utilities companies.”

Meanwhile, energy supplier Eon suggested more than half of small business owners do not read the terms and conditions of contracts they receive from their utilities suppliers.

As a result, Eon said it has radically overhauled the way it communicates with its small business customers by cutting the number of product names and by simplifying its terms and conditions.The company has cut their number of products to five, and the new terms and conditions, which have been radically simplified to signpost key contract details, start going out to customers this week.

The research also found that small business owners were least likely to read the terms and conditions provided by their water supplier (just 2 per cent), followed by energy supplier (24 per cent), or broadband supplier (26 per cent) and most likely to give their telephone or mobile contract most of their time (at 48 per cent).

The worst offenders by sector were businesses in telecoms and designers, with over two thirds stating they never read terms and conditions. Engineers followed with 64 per cent, closely followed by the legal profession (63 per cent) and public services (61 per cent), all saying they would file the information immediately, only referring to it if they needed a telephone number.
Source: Utility Week

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