NMa imposes additional rules for energy contract termination fees

The Netherlands Competition Authority (NMa) stimulates energy providers to provide consumers with clear information about the continuation of fixed-term contracts following expiry. Energy companies who continue fixed-term contracts without notification to consumers may only charge a limited termination fee of EUR 25 in case consumers decide to switch suppliers following the expiry date. Energy companies who timely inform consumers that their contract is about to expire may charge a full termination fee of EUR 50 in case consumers decide to switch suppliers.

The Netherlands Competition Authority (NMa) stimulates energy providers to provide consumers with clear information about the continuation of fixed-term contracts following expiry. Energy companies who continue fixed-term contracts without notification to consumers may only charge a limited termination fee of EUR 25 in case consumers decide to switch suppliers following the expiry date. Energy companies who timely inform consumers that their contract is about to expire may charge a full termination fee of EUR 50 in case consumers decide to switch suppliers.

By contacting ConsuWijzer, consumers have informed the NMa about a lack of clarity on whether, and at what time, a fixed one, two and three year contract is continued. Consumers assume that contracts terminate on expiry, but find out upon switching suppliers that their contract is being continued. 'This adversely affects transparency and dynamics in the energy market', comments Peter Plug, Director of the Office of Energy Regulation of the NMa. 'We make it obligatory for companies to clearly outline expiry provisions as part of the terms of contract. Furthermore, we now stimulate companies to let consumers know beforehand that their contracts will be continued.'

Besides imposing additional regulation in the field of termination fees, the NMa has set out a term within which termination fees must be charged. Whenever energy companies wish to charge consumers with a termination fee, this must be done within a two-month period. This term equals the term prescribed for sending out annual settlements. The NMa was informed via ConsuWijzer that some companies have overrun the maximum charging period.

The additional rules on termination fees and information on how to report on excessive energy contract termination fees may be found on https://www.consuwijzer.nl.

The NMa not only welcomes signals on unexpected or excessive termination fees, but would also like to hear about consumer experiences of fixed contracts and flexible tariffs. Flexible tariffs may be unexpectedly increased shortly after the commencement of a contract. Consumers are called upon to report such practices with the NMa by contacting ConsuWijzer (https://www.consuwijzer.nl ) on 088 070 7070. Signals help the NMa determine whether further investigation is required.