Changes to the way that small supplier Outfox the Market charges monthly direct debit payments has caused concern among customers.
From December, Outfox the Market customers will see their current monthly direct debit payments adjusted to rates up to 40% higher between October and March, and 40% lower between April and September.
On average this will add an extra £33 to customers’ monthly payments this winter, which has come as an unwelcome surprise just before Christmas.
The supplier’s variable prices will also increase by 7% on average after two announcements in June and September.
This price rise will hit the firms’ variable Zapp tariff, which is one of the cheapest dual-fuel energy deals for an average household. On average bills will rise to £987 per year, which is up £180 from the start of 2018 and a £64 per year increase on current prices following the previous hikes.
Customers that are dissatisfied with these changes are able to leave for free however, as the supplier does not charge exit fees on variable tariffs.
However, the small number of customers on fixed tariffs face exit fees of £50.
In response to customer concern that the winter prices would apply for the whole year, the firm said in a Facebook statement that after the increased costs in winter “payments will then be reduced to the much lower summer schedule for April, May, June, July, August and September. The winter uplift will then begin again in October 2019.”
It added that the increase in prices only serves to pass on a “true reflection of the cost of energy” onto customers. Whilst this suggests that the rising wholesale costs were the key factor in the price hike, an industry source told Utility Week that Outfox the Market is “probably struggling with cash flow”
Outfox the Market replied, saying that while they were financially sound their low prices depended upon their increased prices in winter.
The company emerged in 2012 and committed to pricing via transparent methods. It also promised to supply energy generated from 100% renewable sources. They claim that most of their renewable energy is generated in the UK, despite a partnership with DONG energy, a Danish company focussed on wind farms.
Keith Bastian, chief executive of Outfox the Market defended the changes. He said that these increased costs played a part in promoting “a philosophy of fairness”, adding that introducing them “avoids customers who are in credit funding other customers who are not paying enough for their energy.”
“Outfox the Market has made a real and positive difference to the energy market. We have helped thousands of customers save large amounts on their energy costs by providing some of the cheapest unit prices in the UK.
“To continue to do this we need to ensure fairness for all of our customers with our billing system. Introducing a winter uplift means customers payments simply match their consumption.”