Norwegian customers warned about energy firms taking advantage of new rule
New rules for advertising energy contracts were introduced in Norway last week. Some firms are using the new rules as an excuse to try and offer customers more expensive contracts, the Consumer Council warns.
The Price Disclosure Act, which entered into force on November 1st, requires, among other things, that Norwegian electricity companies disclose more information on their energy contracts, as well as information on all contracts that are in force - regardless of whether some are no longer offered.
On Monday, the Consumer Council warned that some companies are using the new rules as an excuse to try and offer customers more expensive contracts.
The watchdog is calling on consumers to be careful so that electricity companies don't use the new rules as an excuse to increase their profits.
In recent days, the electricity companies Straumsalselskapa Norgesenergi and Kraftriket sent out notices to their customers that they are reducing the number of contracts.
A warning from the Consumer Council
The Consumer Council applauds the "clean-up" that is intended to streamline contract options but asks customers to be alert as some companies are using the opportunity to increase their profits by trying to move them to new deals so there is no need for the current agreement to be disclosed.
"We have been contacted by consumers who feel that they have to pay more for the electricity, on the grounds that the company is cleaning up their contracts due to new rules," senior legal adviser Thomas Iversen at the Consumer Council noted.
"I am afraid that many people will be tempted to believe that it is a question of minor changes to comply with the requirements of the new Price Disclosure Act, while in reality, they have to pay more for electricity," Iversen adds.
In a phone call with The Local, Iversen summed up the key things people should do if they get a notification from their electricity provider in relation to the new rules:
1. Compare your old and new agreement: When you get a notice from your electricity provider, look at your existing electricity delivery agreement, and compare your current service agreement with the new price and price structure.
2. Remember that you can change providers: If the new service agreement is less than ideal, that is, more expensive, you are free to get a new deal with any other provider you want.
3. Compare agreements at strømpris.no: The Norwegian Consumer Council has created a digital service (available here) where you can compare all contracts and providers. It made an effort to make a list that is quite simple to use, with the cheapest on the top.
Questionable practices
In the example notification from an electricity company that the Consumer Council has received, it is emphasised that the price elements in the agreement are the same as before, which only means that the electricity agreement still contains the following items: electricity price, fixed terms, and surcharges.
However, it does not mention price changes. The notification also doesn't state the terms of the old agreements. Only the price of the new agreements is specified, obscuring the fact that the companies are charging more.
"The new rules came into effect last week, and they will make it easier for consumers in the market. But there are unintended consequences like this… Energy providers are doing 'house cleaning,' and some old and good deals are being cancelled. That's why we are asking consumers to be alert and not hesitate to seek out other options," Iversen told The Local.
Comments
See Also
The Price Disclosure Act, which entered into force on November 1st, requires, among other things, that Norwegian electricity companies disclose more information on their energy contracts, as well as information on all contracts that are in force - regardless of whether some are no longer offered.
On Monday, the Consumer Council warned that some companies are using the new rules as an excuse to try and offer customers more expensive contracts.
The watchdog is calling on consumers to be careful so that electricity companies don't use the new rules as an excuse to increase their profits.
In recent days, the electricity companies Straumsalselskapa Norgesenergi and Kraftriket sent out notices to their customers that they are reducing the number of contracts.
A warning from the Consumer Council
The Consumer Council applauds the "clean-up" that is intended to streamline contract options but asks customers to be alert as some companies are using the opportunity to increase their profits by trying to move them to new deals so there is no need for the current agreement to be disclosed.
"We have been contacted by consumers who feel that they have to pay more for the electricity, on the grounds that the company is cleaning up their contracts due to new rules," senior legal adviser Thomas Iversen at the Consumer Council noted.
"I am afraid that many people will be tempted to believe that it is a question of minor changes to comply with the requirements of the new Price Disclosure Act, while in reality, they have to pay more for electricity," Iversen adds.
In a phone call with The Local, Iversen summed up the key things people should do if they get a notification from their electricity provider in relation to the new rules:
1. Compare your old and new agreement: When you get a notice from your electricity provider, look at your existing electricity delivery agreement, and compare your current service agreement with the new price and price structure.
2. Remember that you can change providers: If the new service agreement is less than ideal, that is, more expensive, you are free to get a new deal with any other provider you want.
3. Compare agreements at strømpris.no: The Norwegian Consumer Council has created a digital service (available here) where you can compare all contracts and providers. It made an effort to make a list that is quite simple to use, with the cheapest on the top.
Questionable practices
In the example notification from an electricity company that the Consumer Council has received, it is emphasised that the price elements in the agreement are the same as before, which only means that the electricity agreement still contains the following items: electricity price, fixed terms, and surcharges.
However, it does not mention price changes. The notification also doesn't state the terms of the old agreements. Only the price of the new agreements is specified, obscuring the fact that the companies are charging more.
"The new rules came into effect last week, and they will make it easier for consumers in the market. But there are unintended consequences like this… Energy providers are doing 'house cleaning,' and some old and good deals are being cancelled. That's why we are asking consumers to be alert and not hesitate to seek out other options," Iversen told The Local.
Join the conversation in our comments section below. Share your own views and experience and if you have a question or suggestion for our journalists then email us at [email protected].
Please keep comments civil, constructive and on topic – and make sure to read our terms of use before getting involved.
Please log in here to leave a comment.