B898 - Legacy Overcharging Bill 2015

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Birchington
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B898 - Legacy Overcharging Bill 2015, TSR Government
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LEGACY OVERCHARGING BILL 2015
An Act to regulate the overcharging of legacy customers by energy companies

BE IT ENACTED by the Queen's most excellent Majesty, in accordance with the provisions of the Parliament Acts 1911 and 1949, and by the authority of the same, as follows:-

1: DEFINITIONS
(1) A "Legacy Customer" is defined as a customer who has paid for the services provided by an energy company for 2 years or longer.
(2) "Overcharging" is defined as charging a customer a price for goods or a service higher that that advertised.

2: PUNISHMENT
(1) Any reported acts of overcharging will meet a penalty of 10 times the amount they overcharge their legacy customers.
(2) In the event that an energy company has faced penalties for 3 years in a row, the Secretary of State may choose to remove their licence.

3: COMMENCEMENT, SHORT TITLE AND EXTENT
(1) This Act may be cited as the Legacy Overcharging Act 2015.
(2) This Act shall extend to the United Kingdom; and
(3) Shall come into force on the 1st of January 2016.


Notes
This is the first bill aimed at putting into law the contents of the review from the Department for the Environment, Energy and Climate Change.

The amount that legacy customers have been overcharged by had increased from £20 on average in 2009 to £60 in 2013. This bill therefore has the potential to save customers substantial amounts of money on their energy bills and promotes ethical trading.

Since 2008 Ofgem has been aware that the Big Six have taken advantage of the stickiness of their legacy customers by charging them more than new customers. This has given the companies the opportunity to cross-subsidise discounts for new customers and undercut competition from challenger companies. Despite Ofgem’s attention to this issue, the amount legacy gas customers were overcharged almost trebled from £20 to just under £60 from 2010 to 2013. Legacy electricity customers have been overcharged by around £34 since 2011.

To illustrate this: British Gas could be earning in the region of £637 million more per year selling gas to its legacy customers than would be the case if other suppliers sold them the same amount of gas.

A new regulation will be introduced stipulating that the Big 6 will face an automatic fine every year at x10 the amount they overcharge their legacy customers. Ultimately the companies should face the risk of having their licences revoked if they continue to overcharge their legacy customers with the added risk of overcharging companies having their licenses revoked.
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James Milibanter
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Aye, obviously!
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emiloujess
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Aye
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Jammy Duel
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Is there a source for any of the notes?

And this just highlights the ineptitude of bill payers.
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James Milibanter
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(Original post by Jammy Duel)
Is there a source for any of the notes?

And this just highlights the ineptitude of bill payers.
http://www.bbc.co.uk/news/business-33420734

http://www.independent.co.uk/news/bu...-10053050.html

http://www.theguardian.com/uk-news/2...-to-234-a-year
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Jammy Duel
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I think the BBC one has an interesting definition of "competitive market", unless they were quoting the CMA, in which case they do. How is it not a competitive market if providers make the most of the incompetence of their customers?
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James Milibanter
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(Original post by Jammy Duel)
I think the BBC one has an interesting definition of "competitive market", unless they were quoting the CMA, in which case they do. How is it not a competitive market if providers make the most of the incompetence of their customers?
People lead busy lives, where the free market wants to take advantage of that the state must put forward regulation to protect the interests of consumers.
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Jammy Duel
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(Original post by James Milibanter)
People lead busy lives, where the free market wants to take advantage of that the state must put forward regulation to protect the interests of consumers.
So busy that bar the everybody bar the very busiest (who are also very likely to be in the group of people for which the extra cost is pretty meaningless) has time to cram hours and hours and hours of mass media consumption into their day, whether that be watching TV or browsing the net. "Busy lives" is often an excuse for ineptitude and laziness.
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James Milibanter
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(Original post by Jammy Duel)
So busy that bar the everybody bar the very busiest (who are also very likely to be in the group of people for which the extra cost is pretty meaningless) has time to cram hours and hours and hours of mass media consumption into their day, whether that be watching TV or browsing the net. "Busy lives" is often an excuse for ineptitude and laziness.
It's a shame that we don't have PR in this place.
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Jammy Duel
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(Original post by James Milibanter)
It's a shame that we don't have PR in this place.
The relevance of that being?

And According to the FT, original source being citi investment research and analysis, for the Ofcom communications resport 2010 it is 8.8 hours a day on average (although something seems off because that isn't the 30% of the day not spent sleeping or performing non-media activities.
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James Milibanter
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(Original post by Jammy Duel)
The relevance of that being?

And According to the FT, original source being citi investment research and analysis, for the Ofcom communications resport 2010 it is 8.8 hours a day on average (although something seems off because that isn't the 30% of the day not spent sleeping or performing non-media activities.
You went and called a large number of the population lazy and used it to justify unethical trading, would probably bring some bad PR irl.

In any case, spending time to switch energy companies every year or so isn't something that most families in Britain have as a priority. These companies are making hundreds of millions, if not over a Billion pounds a year by overcharging their legacy customers.
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Jammy Duel
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(Original post by James Milibanter)
You went and called a large number of the population lazy and used it to justify unethical trading, would probably bring some bad PR irl.

In any case, spending time to switch energy companies every year or so isn't something that most families in Britain have as a priority. These companies are making hundreds of millions, if not over a Billion pounds a year by overcharging their legacy customers.
Bad PR would hit everybody very badly. If people can't be bothered to spend, what, half an hour a year checking energy prices to save large sums of money they are the only ones to blame, it's not like it takes as long as it used to, unsurprisingly I imagine many will complain they don't have enough money and complain that it is the company's fault that they, as individuals, chose not to act. Give me a minute to annoy you with a reductio ad absurdum.
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James Milibanter
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(Original post by Jammy Duel)
Bad PR would hit everybody very badly. If people can't be bothered to spend, what, half an hour a year checking energy prices to save large sums of money they are the only ones to blame, it's not like it takes as long as it used to, unsurprisingly I imagine many will complain they don't have enough money and complain that it is the company's fault that they, as individuals, chose not to act. Give me a minute to annoy you with a reductio ad absurdum.
Even IF that were the case, we can't be using that as a justification for unethical trading. If I wanted to be radical I'd introduce caps or even nationalise the sector, but this is a nice, moderate approach that will either bring people's bills down or bring a nice bit of money into the treasury.
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Jammy Duel
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(Original post by James Milibanter)
Even IF that were the case, we can't be using that as a justification for unethical trading. If I wanted to be radical I'd introduce caps or even nationalise the sector, but this is a nice, moderate approach that will either bring people's bills down or bring a nice bit of money into the treasury.
For a start, it isn't actually unethical trading. I suppose bringing bills down is a nice change from the record of this government.
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James Milibanter
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(Original post by Jammy Duel)
For a start, it isn't actually unethical trading. I suppose bringing bills down is a nice change from the record of this government.
It's the overcharging of customers, hardly ethical. I did ask for some time to get to household bills, and I did say I'd be putting forward ways to bring them down.
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Jammy Duel
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(Original post by James Milibanter)
It's the overcharging of customers, hardly ethical. I did ask for some time to get to household bills, and I did say I'd be putting forward ways to bring them down.
You may define it has hardly ethical, but that does not make it unethical/unfair trading. And you may have brought them down for some, but I'm not sure whether it comes with a net decrease.
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barnetlad
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I will support this Bill. Energy companies have been quick to up prices when wholesale prices go up but not the reverse, and this Bill will put some of this excess profit to good use. The first batch of customer refunds could help offset this winter's bills. I expect it will also contribute to simpler tariffs.
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Andy98
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Aye

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TheDefiniteArticle
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So, according to this Bill, is a discount offered to new customers only something which creates 'overcharging' in respect of old customers?
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Aph
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I would like to see what you define as overcharging as above.
Also I am worried that the wording of this bill means that when energy companies charge too much at first from their estimates of how much you used and you then show you used less in which case that money is used to knock money off future bills would be banned.

This would result in undercharging at first then extra bills later on which would make it hard for people to manage their finances.
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