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Rollover Contracts

Rollover is a costly trap that is all too easy to fall into. Here we explain what it is, your legal rights and how to avoid it..

When your business energy agreement is due to end, you need to cancel it within a set time period or your energy supplier can (and will) automatically sign you up to a new contract. This is what is called a ‘rollover’ contract.

The agreement you’re rolled over will not be good value for money or a competitive tariff, and you’ll be stuck with it for at least one year.

Rollover and the law

Rollover might seem unfair, but it isn’t against the law and it doesn’t break any rules.

There are however some rules just about how rollovers should be handled that provide you with some protection if your business is a micro business:

  • Around 60 days (but no longer than 120 days) before your contract is due to end, your energy supplier must send you a letter telling you the details of your renewal offer and the contract you will be rolled on to if you fail to act on your renewal.
  • You can’t be rolled over to a new contract that lasts longer than 12 months.

Once you’ve received your renewal letter, you will then have a defined period in which you need to tell your energy supplier that you don’t want to accept the tariff you were offered. This time period is specific to each supplier,

Rollover, the market, and the future

Rollover is controversial. It’s unpopular with businesses that get caught out and they feel like they’ve been unfairly treated.

It also contributes to boredom, because for many busy businesses it’s all too easy to let your contract rollover, even though it’s an expensive option.

Lloyd energy has energetically worked with consumer organizations such as the FSB, Consumer Futures and the Forum of Private Businesses as well as Energy UK, Ofgem, DECC and Number 10 Downing Street as part of the SME Energy Working Group.

James approached the government more than the concerns around rollover in 2012 and by 2013 the working group had been established and determined that its number one focus should be to find a solution for rollover contracts.

By the end of September 2013, all of the Big 6 business Energy suppliers, British Gas Business, EDF, SSE, Npower, Eon and Scottish Power had agreed to end or amend their rollover policies by the end of 2014. Indeed these policies are now mainly in effect and customers are benefitting of newfound freedom of movement already.

Each supplier sets different timescales and solutions and by visiting our dedicated supplier pages you can understand your suppliers’ policy.

Beyond the ‘Big 6’ the condition is less clear, most smaller supplier continue to operate rollover contracts, citing their importance to the security of their portfolio. It is important to point out that rollover contracts don’t have to be poor value for money and even if your chosen supplier continues to operate rollover contracts it needs to be seen in the overall context of the market price.

How can you avoid being rolled over?

If your supplier continues to run a rollover contract and your business is a micro-business, you can avoid being automatically rolled over by providing termination notice to them in line with their policies.

To find out your energy suppliers’ policy on execution notice visit our dedicated supplier pages.

Regardless of when you terminate (as long as you do), you can use Lloyd energy to secure you a new contract anything up to 6 months before your contract end date.

You won’t be able to start this contract before your current one finishes but you will be able to lock in your prices at the earliest opportunity so that when you see a better deal, you can act to secure it.

If for whatever reason, you terminate your agreement with your current business energy supplier but do not agree a new contract with them or another supplier before your end date then you will have to pay out-of-contract rates. These are very corrective rates designed to force you to agree a lower-priced, but still, premium-priced fixed term contract with the supplier.

What can you do if you have been rolled over?

If you have been rolled over, sadly, it’s too late in most circumstances, there’s simply nothing you can do.

This is why the rollover contract is so unfair as individual circumstances were irrelevant if you missed the opportunity to terminate or negotiate, you rolled.

Though, even if your business energy supplier won’t free you from your contract Lloyd energy will work with your supplier to negotiate backdates for customers caught by rollover terms. Not all business energy suppliers offer this and not all customers will be granted this however it is one benefit that Lloyd energy can bring. What is for definite is that you will remain on supply with the supplier; it will just be a question of how much you will pay for the pleasure.

For most rollovers, however, you will be locked in for the full 12 months and whilst this will be both expensive and frustrating it pales next to the prospect of making the same mistake again. Therefore directly terminate your contract as soon as you become aware you have been rolled and contact Lloyd energy with your new contract end date so we can line up a deal for you fine in advance of the next deadline

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