The industry regulator is widening the scope of its Standard License Condition 7A (SLC7A) to cover 150,000 more small businesses.
Since January 2010, Condition 7A has stopped energy suppliers from using sneaky tactics designed to roll customers into expensive long-term contracts if they don’t terminate their contract in due time.
The condition means that smaller businesses can now terminate their contract at any time (instead of during a specified window) and can only be rolled into a new contract for a maximum of 12 months.
See our information page on Ofgem Condition 7A for specific details of what defines a micro-business and what Condition 7A means.
Ofgem said on their website: “Under our proposals we will extend existing safeguards that ensure clear contract terms for micro-businesses to cover a further 150,000 small businesses.”
The proposal is that any business spending around £10,000 per annum on electricity or gas will be protected by SLC7A, taking the total coverage of the market to around 90% of organisations.
These are still just proposals, and will likely not come into effect until summer 2013 when the consultation phase is over.