Consumers unsure over fees for exiting household contracts
Price comparison website Switcher.ie found that two-thirds of utility users either did not know about early exit fees or were unsure of the amount charged.
One in six (17%) of admitted that they had been charged exit fees in the past by a utility company and the average termination charge was €180.
Switcher.ie is urging consumers to note the minimum term, cooling-off period and early exit fees when signing a contract.
An analysis by the independent price comparison and switching service reveals that consumers face penalties of up to €300 for leaving a utility contract six months early.
It is concerned that the fees involved, which are mostly avoidable, are deterring consumers from looking for better value or more cost-effective deals.
Switcher.ie’s research points to widespread uncertainty among utility consumers about early exit fees on key household contracts.
The online survey of 1,000 adults conducted in May shows that 65% of electricity, gas and home phone users and 63% of broadband customers are unclear about the fees.
Also unsure about exit penalties are half of television (54%), bins and recycling (52%) and mobile phone (51%) customers.
Energy suppliers appear to be leading the way regarding transparency. Fees are displayed clearly on websites, and most charge a flat fee of €50 for cancelling a contract early.
New regulations from the Commission for Energy Regulation mean that, from next month, energy suppliers will have to give consumers 30 days’ notice before they come to the end of their contract.
However, Switcher.ie found some telecom companies need to make it easier to find information on exit fees on their websites. Charges for cancelling contracts tend to be higher too, reaching €300 for someone who cancels a contract with six months remaining.
Eoin Clarke, managing director of Switcher.ie, said that, with the cost of living already squeezing household finances, consumers needed to feel that they were free to shop around for better value utility deals.
“We’d encourage suppliers to highlight things like the minimum term, discount period and early exit fees as clearly as possible, both when consumer sign-up as well as on their websites, and we’d urge consumers to take note of these things before entering into a contract,” said Mr Clarke.
