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27 July 2013 | Will Green
British Gas has announced an end to “rollover” contracts that have been criticised as “uncompetitive”.
The energy supplier says from September it will no longer offer rollover contracts, where firms are automatically committed to a new contract when the existing one ends if they take no action.
Critics say rollover contracts have become a “source of excess profits for suppliers”.
Stephen Beynon, managing director of British Gas Business, said: “We are committed to leading the way in making the sale of energy simple and transparent for all our customers.
“Increasing numbers of our small business customers have told us they don’t like the way the energy industry automatically moves them onto new contracts, so we’ve decided we will lead the way and put an end to this practice for our customers.
“We’re the first supplier to announce an end to auto-rollover contracts and we’re calling on the industry and the regulator to work together to ensure that all customers have a transparent choice of products that never include auto-rollover.”
The firm says none of its customers will be on rollover contracts by June 2014.
Mark Alston, general manager of energy purchasing consultants ENER-G Procurement, said: “Rollover contracts have become a source of excess profits for suppliers over the years and as such there is no place for them in our mature energy supply market.
“The term rollover implies a soft landing, yet the reality is that organisations which fail to meet deadlines to renew or switch energy contracts are automatically rolled over into uncompetitive auto-renewal prices or even to extortionate out of contract rates.”