Are you confused about what a deemed contract with an energy supplier is? Don’t worry, you’re not alone. Many people find the terminology used by energy companies confusing, but it’s important to understand what you’re signing up for.
A deemed contract is an agreement that’s automatically put in place when you move into a new property and start using energy without setting up a contract with a supplier. In this article, we’ll explain everything you need to know about deemed contracts and how they can affect your energy bills. So, let’s get started!
A deemed contract with an energy supplier is a type of contract that comes into effect when a business or home moves into a new property and starts using energy without setting up a contract with an energy supplier. The supplier will automatically assign a deemed contract and the customer will be charged at a higher rate until a new contract is set up.
Understanding Deemed Contracts with Energy Suppliers
What is a Deemed Contract?
A deemed contract is a type of energy contract that is automatically assigned to a customer who has not signed up for a specific energy tariff. This could happen if you move into a new property and continue to use the energy supplier that the previous occupants used, or if your current energy contract has expired, and you have not renewed it or switched to a new supplier.
Deemed contracts are generally more expensive than fixed-term contracts, and you may not be able to take advantage of any special offers or promotions that are available to customers on specific tariffs.
How are Deemed Contracts Calculated?
The rates for deemed contracts are calculated by the energy supplier and are usually higher than those of fixed-term contracts. The supplier has the right to charge you a deemed rate until you agree to a new contract or switch to a different supplier.
Deemed rates are usually based on the supplier’s standard variable rate, which is the rate you pay if you are on a variable tariff. This rate can fluctuate depending on market conditions, and you may end up paying more than you would on a fixed-term contract.
Benefits of Deemed Contracts
There are very few benefits to being on a deemed contract, as they are typically more expensive than fixed-term contracts. However, if you are in a situation where you have no other option but to be on a deemed contract, it can give you some flexibility while you search for a better deal.
For example, if you move into a new property and are automatically put on a deemed contract, you may need some time to research and compare energy suppliers before you choose a new tariff. Being on a deemed contract can give you the time you need to make an informed decision.
Drawbacks of Deemed Contracts
The main drawback of a deemed contract is that they are usually more expensive than fixed-term contracts. This means that you could be paying more than you need to for your energy supply.
Another drawback is that you may not have access to the same level of customer service and support as you would on a fixed-term contract. This is because energy suppliers often reserve their best deals and customer service for customers on specific tariffs.
How to Avoid Deemed Contracts
The best way to avoid being put on a deemed contract is to sign up for a fixed-term energy contract or switch to a different supplier when your current contract is coming to an end.
It’s important to shop around and compare energy tariffs before you sign up for a new contract. This will help you find the best deal for your energy needs and budget.
Deemed Contracts vs Fixed-Term Contracts
The main difference between a deemed contract and a fixed-term contract is that a fixed-term contract has a set end date and a fixed rate for the duration of the contract. This can give you peace of mind and help you budget effectively.
In contrast, a deemed contract has no set end date and the rates can fluctuate depending on market conditions. This means that you could end up paying more than you need to for your energy supply.
Deemed Contracts vs Tariff Comparison Rates
Tariff comparison rates (TCRs) are designed to help customers compare energy tariffs and find the best deal for their needs. They take into account all the costs associated with an energy tariff, including the unit rates and any standing charges.
In contrast, deemed rates are based on the supplier’s standard variable rate, which may not include all the costs associated with your energy supply. This means that TCRs are a more accurate reflection of the costs of an energy tariff, and can help you make a more informed decision when choosing a new tariff.
How to Switch Energy Suppliers
Switching energy suppliers is a straightforward process that can save you money on your energy bills. To switch, you need to:
1. Compare energy tariffs and find the best deal for your needs and budget
2. Contact the new supplier and provide them with your details
3. The new supplier will contact your old supplier to arrange the switch
4. Your new supplier will confirm the switch and provide you with a start date for your new tariff
5. You will receive a final bill from your old supplier, which you will need to pay
Conclusion
Deemed contracts are a type of energy contract that is automatically assigned to customers who have not signed up for a specific tariff. They are usually more expensive than fixed-term contracts and can be a source of frustration for customers who want to save money on their energy bills.
To avoid being put on a deemed contract, it’s important to sign up for a fixed-term contract or switch to a different supplier when your current contract is coming to an end. By shopping around and comparing energy tariffs, you can find the best deal for your energy needs and budget.
Frequently Asked Questions
Here are some common questions about deemed contracts with energy suppliers:
How does a deemed contract with an energy supplier arise?
A deemed contract with an energy supplier arises when a customer starts to receive energy from a supplier without agreeing to a contract. This can happen, for example, when a customer moves into a new property and starts using the energy supply before agreeing to a contract with a supplier. In this situation, the customer will be on a deemed contract with the supplier that is providing the energy.
Deemed contracts can also arise when an existing contract with a supplier comes to an end and the customer continues to receive energy from the same supplier without agreeing to a new contract. In this situation, the customer will be automatically transferred to a deemed contract with the supplier.
What are the terms of a deemed contract with an energy supplier?
The terms of a deemed contract with an energy supplier will vary between suppliers. In general, deemed contracts are likely to have less favorable terms than standard contracts that are agreed between the customer and the supplier. This is because the supplier has not had the opportunity to negotiate the terms of the contract with the customer. Deemed contracts may have higher rates for energy usage and may include additional charges.
It is important for customers who are on deemed contracts to review the terms of the contract and consider whether it is in their best interest to switch to a standard contract with the supplier or to a different supplier.
How can I switch from a deemed contract to a standard contract with my energy supplier?
To switch from a deemed contract to a standard contract with your energy supplier, you will need to contact the supplier and agree to a new contract. The supplier may require you to provide some information about your energy usage and may carry out a credit check before agreeing to a new contract. It is important to review the terms of the new contract before agreeing to it to ensure that it is in your best interest.
If you are unable to agree a new contract with your existing supplier, you may need to switch to a different supplier. You can use a price comparison website to compare the prices and terms of different energy suppliers and find the best deal for you.
What happens if I do not switch from a deemed contract to a standard contract?
If you do not switch from a deemed contract to a standard contract with your energy supplier, you will continue to be on the deemed contract. This may mean that you are paying higher rates for energy usage and may be subject to additional charges. It is important to review the terms of the deemed contract and consider whether it is in your best interest to switch to a standard contract with the supplier or to a different supplier.
If you are on a deemed contract because you have moved into a new property and you are not sure who the supplier is, you can use the “Find My Supplier” service to locate the supplier and agree to a new contract with them.
Can I negotiate the terms of a deemed contract with my energy supplier?
Deemed contracts are generally not negotiable as the supplier has not had the opportunity to negotiate the terms of the contract with the customer. However, if you are on a deemed contract and you are unhappy with the terms, you can contact the supplier and try to negotiate a new contract with more favorable terms. The supplier may be willing to negotiate if they want to retain you as a customer.
If you are unable to negotiate a new contract with your existing supplier, you may need to switch to a different supplier. You can use a price comparison website to compare the prices and terms of different energy suppliers and find the best deal for you.
In conclusion, a deemed contract with an energy supplier is an agreement that is automatically put in place when a customer moves into a new property and starts using energy without signing up for a specific contract. It is important to note that the terms and conditions of the deemed contract may not be as favorable as those of a negotiated contract, so it is always a good idea to shop around and find the best deal for your energy needs.
To avoid being locked into a deemed contract, it is important to inform your energy supplier of your move as soon as possible. This way, you can negotiate the terms of your contract and avoid being stuck with an unfavorable deal. It is also important to regularly review your energy contract to ensure that you are still getting the best deal for your needs.
Ultimately, understanding the ins and outs of deemed contracts with energy suppliers can help you make informed decisions about your energy usage and ensure that you are getting the best value for your money. By staying informed and proactive, you can avoid being caught in an unfavorable contract and enjoy the benefits of affordable and reliable energy.
