Auditel Consultant:
Chris Bourke

‘Crafty’ Suppliers – You’ve got to watch them!

27 Oct 2009 | Filed under: Supplier Management

There’s two reasons why an energy supplier can object to a customer leaving them.

The first reason is if they are owed money and the second one is if the conditions of the existing supply contract are still in force. This usually revolves around correct termination. Sounds simple doesn’t it. Well it’s not as simple as it sounds!

One well known supplier has created a lot of problems on both counts over the last month on both issues.

To start with their billing can be a little erratic and needs keeping an eye on generally. However with one of my clients they’ve been a nightmare from the start, taking direct debits on varying dates, taking them twice at times and most annoying of all a recurring, significant difference between what is owed in reality and what the balance of account statement said. This was only solved by going through line by line with a senior accounts person at the supplier for an hour (once we got hold of someone sensible), but we got there in the end.

This was followed by the same supplier unilaterally putting out changes to it’s contractual terms and conditions such that it will only accept termination between 90 and 120 days prior to the contract end date. Now they didn’t exactly broadcast this so many customers will have been caught out because they didn’t put the notice in during this window.

This can translate into a lot of money as I just saved one client 41% on his electricity renewal with this supplier!

The only answer to dealing with this type of issue is to have detail focused cost management in place. It’s well worth it because the risks – such as those above – are real and significant.