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ACM imposes fine on Innova Energie for offering consumers contracts with too high termination fees

30-09-2020

The Netherlands Authority for Consumers and Markets (ACM) has imposed a fine of 1,250,000 euros on Dutch energy company Innova Energie B.V. for offering energy contacts with too high termination fees to consumers who are listed in the Dutch Chamber of Commerce (KvK). In most of these cases, energy was supplied to self-employed workers (or independent contractors) at their home addresses. These individuals used this energy mostly for private purposes.

Unreasonably high termination fees 

Innova Energie offered this group of consumers energy contracts with unreasonably high termination fees, in some cases up to 1,000 euros per customer. As a result, switching to another energy supplier became less attractive for them. A large number of customers complained about this situation. Consumer protection rules apply to the supply of natural gas and electricity for private consumption, even if the supply contract was signed by an independent contractor or some other small-business owner. In those situations, termination fees are subject to a statutory maximum of 250 euros for gas and electricity combined.

Energy suppliers are required to check actively whether customers are entitled to consumer protection, and if that is the case, energy suppliers cannot set its termination fees higher than the statutory maximum. In March 2017, ACM already reminded, in writing, Innova Energie of these rules. However, Innova Energie still continued to offer contracts with too high termination fees to customers who are entitled to consumer protection. Now the company has been fined for these practices. All fines collected by ACM go to the Dutch treasury. Funds from the Dutch treasury are used to make investments that benefit society as a whole.

Cateautje Hijmans van den Bergh, Member of the Board of ACM, explains: “Consumers who are independent contractors, too, must be able to have confidence in a well-functioning energy market. For example, they should be able to switch energy suppliers as easily as any other consumer. Unreasonably high termination fees do not contribute to that well-functioning energy market. A year ago, we already sent a letter to all energy suppliers about this matter.”

ACM already took this decision on June 11, 2020. ACM is only now able to publish the decision about the fine, because Innova had asked the court to stop publication of the decision. As a result of those proceedings, ACM had not been able to publish anything about this case. The District Court of Rotterdam has now ruled that ACM is allowed to publish the sanction decision.

See also

30-09-2020 ACM decision regarding fine on Innova Energie for violating Dutch Electricity Act and Dutch Gas Act (in Dutch)