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E.ON scraps auto-rollover contracts for SMEs

The energy company has announced that it will end auto-rollover contracts in a bid to ease the financial strain on SMEs

e.on logoE.ON will axe auto-rollover contracts for new and existing customers from 1 April 2014. Until this date all customers will be encouraged to use E.ON’s existing opt-out provision.

Meanwhile, customers who do not take another fixed-term contract will be transferred onto E.ON’s cheapest evergreen tariff, which has no exit fees and a 30-day notice period.

In addition, the company will publish all its variable SME tariff rates on its website from 1 October 2013.

Contract renewal window to be extended

Following customer feedback, E.ON’s clients will see their contract renewal window extended. Previously, customers had to choose a contract up to 90 days ahead of the date their existing contract ended on. From 1 April 2014, customers will be able to negotiate a new deal up to 30 days ahead of the end of their current contract.

These changes are a result of research carried out by the organisation. E.ON found that customers prefer to negotiate a new fixed term price contract or to be placed on a variable rate tariff at the end of their existing term, rather than being rolled over onto a new fixed-term contract.

Anthony Ainsworth, sales and marketing director at E.ON UK, commented: “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.

“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 onto our cheapest  variable rate product. We’d really encourage customers to give us a call so we can help them find what’s best for them.”

E.ON following in the footsteps of British Gas

British Gas was the first energy supplier to announce the end of the automatic rolling over of contracts, and will implement the measures from 1 September 2013.

Business customers will no longer be sold products that automatically see them transferred onto further contracts, and from September, will be offered new tariffs.

Furthermore, a new process for renewing the contracts of existing customers without using an auto-rollover will begin in June 2014. Customers already with British Gas will be offered the option to renew, meaning they can decide which tariff they prefer.

Stephen Beynon, managing director of British Gas Business, emphasised the importance of making energy sales “simple and transparent” for all customers.

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