More than 700 households in England who were unable switch gas suppliers are to be freed from unlawful contracts, according to the competition watchdog.
The Competition and Markets Authority (CMA) found BDS Fuels had unlawfully used a clause that automatically renewed the households’ exclusivity contracts without their explicit consent.
The households in Cumbria, North Lancashire and North Yorkshire were locked into repeat exclusivity contracts for liquefied petroleum gas (LPG) and could not switch to a new gas provider.
Customers were required to pay a £350 fee if they wished to break the contract and change providers, however, it is unlawful to automatically roll over these exclusivity contracts without the customers’ explicit agreement.
The move by the CMA comes after concerns were raised about customers being automatically locked into new the exclusivity contracts for LPG – an expensive domestic fuel used for heating and cooking by people who cannot access the UK mains gas grid.
Following the CMA’s intervention, BDS has agreed to remove the unlawful automatic renewal clauses from its LPG contracts, inform all existing customers who were automatically signed up to a new exclusivity contract that they can switch suppliers with immediate effect without paying a fee if they choose to.
In addition, the company has agreed to refund customers who paid a fee to be released from their LPG contract early and provide information to customers annually that clearly details how they can cancel their contract and switch providers.
The CMA will monitor BDS to ensure it is “behaving in accordance” and taking the actions promised.
Adam Land, Senior Director for Remedies, Business, and Financial Analysis at the CMA said: “We are facing a cost-of-living crisis meaning it’s more important than ever that people can shop around and choose the best possible deal for them.
“If we find evidence of businesses preventing this, we won’t hesitate to step in – as we have with BDS Fuels.”