The Belgian Energy Ombudsman Service raises the question of the legality of the new Consumer Agreement with energy suppliers

The Belgian Energy Ombudsman Service raises the question of the legality of the new Consumer Agreement with energy suppliers. This case is particularly alarming while, at the same time, the new energy package is being discussed at EU level and the role of the Ombudsman risks to be undermined by certain wording. NEON believes that Ombudsmen and out-of-court dispute resolution mechanisms should address all consumer complaints in the energy markets, including on bundled offers and new product and service providers such as aggregators. When facing a difficulty, consumers should easily find their way in the always more complex energy market. Consumers must be ensured their rights will be enforced; this is the only way to build long-term engagement and trust in the energy market.

The Belgian Federal Energy Ombudsman Service notes that a significant part of its political advice has not been taken into account in the new Agreement signed on Wednesday, 28 June 2017, which will enter into force in 2018. The Ombudsman Service is concerned that the number of complaints will increase when the suppliers will implement the Agreement.

The Ombudsman Service raises the question of the “legality” of a number of practices that are made possible by this Consumer Agreement, such as:

  • The invoicing of severance pay via fixed charges or subscription fees for a whole year, even if the customer has only stayed one month with his supplier during the first year of delivery, even if the possibility exists to reduce this fee from the second year. Nevertheless, the Electricity and Gas Act explicitly provides that: “When the residential customer or the SME uses the right to terminate their energy contract, no indemnity may be charged”.
  • The limitation of the areas for which the consumer could turn to the Ombudsman Service. The Ombudsman Service would be competent only for disputes relating to electricity and gas and no longer for related areas or bundled offers of other energy products (oil products, firewood, pellets) and energy services such as the installations and maintenance of heating equipment, solar panels, batteries, or even electronic energy-saving devices. The Electricity and Gas Act provides, however, that the Energy Ombudsman Service is responsible for “assessing and examining all questions and complaints of end-customers relating to the activities of an energy company and the functioning of the energy market”.

In the alternative dispute resolution process, the Ombudsman Service will continue to pay close attention to the market practices of energy suppliers and verify their legal compliance with electricity and gas laws and with legal requirements for market practice and consumer protection.

The Ombudsman Service also regrets that some of these proposals to protect consumers and especially vulnerable consumers are not or only incompletely included in the new Agreement, such as:

  • The extension of the contracts with the cheapest available product;
  • Sending down payment invoices: the Ombudsman Service advocates that no down payment invoice should be sent during the month of the annual adjustment invoice or the closing invoice so that the households do not have to face several invoices for one month;
  • Limiting the time for invoicing rectifications of the energy consumption to 12 months from the reception of the meter reading by the supplier;
  • The following measures to deal with payment problems: payment plan without interest or fees, limitation of collection costs of all unpaid invoices to 55 euros, guarantee of a maximum of 2 months of down payment invoices that is automatically reimbursed after a 12-month period without default, explicit mention of the balance to be paid on the invoices for regularisation and finally maintenance of the supplier as sole referent even if the debts are transferred to collection agencies, including abroad;
  • Legible and uniform invoices and contracts so that consumers are better able to evaluate and compare agreed or invoiced prices, tariffs and discounts.

Thanks to the multiple alternative dispute settlements it operates, the Energy Ombudsman Service can monitor the balance between consumers and suppliers. When reading the new Agreement, he wonders if it had been rewritten for consumers or suppliers?