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What's An Erroneous Transfer?

An erroneous transfer (ET) refers to a situation where there is an unintended/unauthorised change of energy supplier for a commercial or industrial customer. It occurs when a business’s energy supply is switched to a new supplier without the consent (or knowledge) of the business owner.

An erroneous transfer differs from a regular transfer, where business owners actively request the change. These erroneous transfers are ‘errors’ mistakenly approved by the new or current energy supplier. They can cause temporary interruptions (and possibly incorrect billing) to your business energy supply.

These are usually quite rare, happening to roughly 1% of switches.

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Can My Energy Supplier Change Without My Permission?

No, they can’t.

Generally, your energy provider cannot change without your consent. Rules are designed to protect the rights of customers/business owners and ensure transparency in the energy market.

It is very important to be aware of these regulations and understand the process to safeguard your energy supply. The consent that is needed from energy suppliers can be as such:

  • Signing a new contract.
  • Agreeing to the terms electronically or verbally (via the telephone).

In rare cases, where your landlord pays your business energy bill (meaning you do not pay it yourself) this can leave room for ‘errors’ as they (landlords) are responsible for business energy bill payments. This means they can switch business energy suppliers without your knowledge or consent.

Why Do Erroneous Transfers Happen?

Erroneous transfers in business energy can occur due to various reasons.

Here are some key reasons behind erroneous transfers:

  1. Administrative errors: Mistakes or oversights in data entry, account management or processing can lead to erroneous transfer errors. This can happen when incorrect customer/business information is recorded in the energy supplier’s system – especially when moving to new business premises.
  2. Data errors: Similar to the above point, the energy supplier may have mixed up your details (such as business address or MPRN/MPAN numbers) with someone else. This results in incorrect data entries which can affect your energy supply.
  3. Miscommunication: In some cases, a miscommunication between energy suppliers, brokers, business owners or third parties can result in an erroneous transfer. This may be due to the misinterpretation of customer consent or supplier-switching instructions.
  4. Unauthorised action: Occasionally, unauthorised actions by energy suppliers/brokers can lead to erroneous transfers. This could be seen as forged signatures on business energy contracts or brokers misleading customers using deceptive tactics to initiate business energy deals.
  5. Computer glitches: Technical issues regarding business energy utilities and tariffs can occur from time to time. These glitches may occur during the transfer process, validation of consent or communication between different systems within the complex infrastructure of the energy market.
  6. Incorrect meter: Meter details may be incorrect on the national database.
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What Happens During An Erroneous Transfer?

During an erroneous transfer in SME business energy and/or larger businesses, you may receive:

  • A letter from your business energy supplier requesting to switch your energy supply,
  • “Sorry you’re leaving” communication, or
  • A final bill that you did not ask for.
Design Elements

How Long Does It Take To Resolve An Erroneous Transfer?

The resolution process between business energy suppliers for ETs can take up to 12 weeks.

  • When business energy suppliers are notified about a potential ET, they are required to reach out to the customer/business within 5 working days. They will then explain their plan of action to address the situation.
  • Within 20 working days, the customer/business should receive confirmation about whether an ET has occurred and which steps are intended to follow.

Who Do I Pay For Energy While An Erroneous Transfer Is Being Fixed?

Continue paying your current supplier.

However, handling business energy payments during an erroneous transfer requires careful consideration to avoid any payment-related complications.

Here are a few useful tips to consider:

  • Always maintain clear communication between business energy suppliers. Keeping communication open and transparent until the ET problem has been resolved is vital.
  • Record all communication correspondence between your business energy suppliers. This documentation serves as a ‘paper trail’ and may come in handy should any issues arise further down the line.
  • Carefully review your business energy tariffs and energy usage on your billing statements (from both old and new business energy suppliers). Check for any discrepancies, double charges, irregular electricity and gas usage and business energy prices.
  • Do reach out to your business energy suppliers if you come across any uncertainties on your bill. Be mindful of how much energy your business uses and compare business energy prices to ensure they are aligned with your energy contract.

What about pay-as-you-go meters?

Similarly to the above, if your business uses a smart meter, continue doing so until the ET issue has been resolved.

On the other hand, if you have noticed you are in credit with your smart meter, you’ll likely have to repay any credit usage. (Do keep track of this as confirmation for energy suppliers.)

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Design Elements

How Long Does It Take To Resolve An Erroneous Transfer?

Yes. And no.

In domestic energy markets, you have the opportunity to receive compensation for ETs. As of May 1, 2019, Ofgem – the UK’s energy regulator – implemented rules and regulations that guarantee automatic compensation for certain issues if you switch energy suppliers for your business.

If your domestic energy supply has been switched without your permission (or if your credit balance is not refunded) within 10 days of receiving your final bill from your old supplier – you are likely entitled to a compensation payout.

In domestic energy supply instances, this includes:

  • You should receive a minimum of £30 for the inconvenience caused.
  • The maximum compensation you can receive is £120 – which is usually paid by the new supplier if your energy supply has not been promptly switched back on.

However, these compensations do not apply to business energy supply. In the case of ETs in business energy, the £30 compensation is seen as insufficient, making this rule not applicable to business electricity prices or business gas rates.

The UK government has introduced two support schemes aimed at non-domestic and business energy consumers.

These are;

  1. The energy bill relief scheme.
  2. The energy bill discount scheme.

The Energy Bill Relief Scheme (EBRS)

This scheme:

  • Provides bill relief for non-domesticated consumers (i.e. businesses, schools, hospitals) that are off the gas grid and use alternative fuels for heating.
  • Allows eligible businesses to receive a fixed payment of £150.
  • Gives businesses that require/use more heating the ability to receive “top-up” payments based on their actual energy usage.
  • Aims to make business energy bills more manageable and supports companies that use alternative fuels.

The Energy Bill Discount Scheme (EBDS)

This scheme:

  • Allows eligible businesses to receive unit discounts on energy bills between April 2023 to March 2024.
  • This discount is subject to a maximum limit (for Great Britain and Northern Ireland) and is based on wholesale prices.
  • Prices business electricity at £19.61 per megawatt-hour (MWh) with a price threshold of £302 MWh.
  • Prices business gas at £6.97 per MWh with a price threshold of £107 MWh.
  • The discount is calculated by the difference between wholesale prices reflected on the energy contract and the price threshold (as mentioned above).
  • This discount is gradually phased in until the MWh reaches the maximum discount per fuel usage (gas and electricity).

What Normally Happens When You Change Energy Suppliers?

Here are a few helpful tips to ensure a smooth transition when switching energy providers:

  1. Take your time to compare business energy prices. This requires careful planning and may involve collecting numerous business energy quotes to make an informed decision. Do remember, that sometimes the cheaper business energy tariff may not be the best option for your business!
  2. Consider renewable energy prices, especially if you want to come off the gas grid.
  3. Compare business energy suppliers‘ pricing structures, contract terms and customer service.
  4. Inform your old supplier about your energy supply change.
  5. In most cases, there is a ‘cooling-off period‘ which is usually about 14 days and gives you the option to cancel your energy contract without paying a penalty. This is to ensure you are satisfied with the new energy supplier and associated business energy tariffs.
  6. Do provide meter readings for both your old and new suppliers to ensure accurate billing during your energy switch.

Conclusion

By understanding the various causes of erroneous transfers, UK businesses can proactively identify any issues and implement preventive measures. Actively managing business energy provider relationships is crucial for UK business owners to manage business energy usage better and minimise energy supply disruptions.

Start your journey and compare business gas and electricity rates with Business Energy Comparison today. Use our price comparison tool and in less time than it takes to make a brew, we’ll compile your best prices from the UK’ s best suppliers.

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Frequently Asked Questions

Is an erroneous transfer permanent?

No, an erroneous transfer is not permanent. It is an unintentional/accidental switch of energy suppliers (without your knowledge/permission) and can take up to 12 weeks to resolve the issue, once reported.

Who gives permission to switch business energy suppliers?

The business owner gives permission to switch energy suppliers. In some cases, where you do not pay for your energy bills yourself, the landlord is then in charge of giving permission to switch energy suppliers.