Centrica puts lid on price rises

British GasBritish Gas owner Centrica has said that it made so much money from hard-pressed householders during the prolonged freeze at the start of the year that it is putting a lid on further price rises for the time being.

The energy giant cashed in after raising its prices by 6% in December, just before the start of the harsh weather, a period that saw customers increase gas consumption by nearly a fifth compared with last year.
But it said that because of the "economic pressures" facing many households it would not pocket the extra earnings, and instead would use them to prevent any further tariff hikes "for as long as possible".

However the pledge comes as cold comfort to many of its eight million customers, who are likely to be shocked by their next bills after cranking up their heating to keep out the bitter cold.
Richard Lloyd, executive director of consumer group Which?, said the announcement highlighted the lack of transparency in the energy market and that "radical action" was needed to provide simpler and fairer bills, more competition and easier switching between providers. He said: "With inflation-busting price hikes and eye-watering profits, it's no wonder less than a quarter of people trust the industry and rising energy prices consistently remain one of consumers' top financial worries. With a big leap in gas use over the winter, huge numbers of people will be shocked by their next bill."

Centrica has faced sustained hostility as it awarded soaring multimillion-pound pay packets to executives while households have struggled to pay rising energy bills. Its pledge to curb future price rises is an attempt to acknowledge publicly its customers' difficulties in the face of both the unforgiving economic climate and the weather.

The announcement came on the day of the company's annual general meeting in London. Earlier this year it disclosed that five bosses received £16.4 million in pay and bonuses as British Gas made profits of £606 million, equivalent to nearly £50 per household.

In Monday's trading update, Centrica said it had "performed well" so far in 2013, with its British Gas residential business on course to deliver full-year profits in line with expectations of £602 million - slightly down on last year due to higher costs.

It added: "As a result of the unusual period of extended cold weather, average residential gas consumption was 18% higher in the first four months of 2013 than in the same period in 2012, and average residential electricity consumption was 3% higher. Recognising the economic pressures facing many of our customers, the board has determined that any benefit arising from the exceptionally cold weather will be used to maintain our price competitiveness. As a result of this decision, we expect the residential energy supply business to deliver an operating profit for the full year in line with expectations, weighted towards the first half." A spokesman said: "We will use that to effectively hold prices for as long as possible."

The company said that so much energy was used over the extended cold period that volumes at its Rough offshore gas storage facility reached a record low level in April. Elsewhere in the update, it also said it had signed up 28,000 more energy customers over the first four months of the year, and had passed the one million mark for smart meters installed in homes and businesses.

10 consumer rights you should know
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Centrica puts lid on price rises

The law states that any goods you buy from a UK retailer should be of satisfactory quality, as described, fit for purpose and last a reasonable amount of time.

This applies even if you buy items in a sale or with a discount voucher. You may have to insist on these rights being respected, though.

Useful phrases to use when you want to show you mean business include, "according to the Sale of Goods Act 1979" and, if it's a service, "according to the Supply of Goods and Services Act 1982".

Some shops will allow you to exchange goods without a receipt, but they can refuse to should they wish.

If the goods are faulty, however, another proof of purchase such as a bank statement should work just as well.

If you attempt to return goods within four weeks of the purchase, your chances of getting a full refund are much higher as you can argue that you have not "accepted" them.

After this point, you can only really expect an exchange, repair or part-refund.

The updated Consumer Credit Act states that card companies are jointly and severally liable for credit card purchases of between £100 and £60,260 (whether or not you paid just a deposit or the whole amount on your card).

Anyone spending between these amounts on their credit card is therefore protected if the retailer or service provider goes bust, their online shopping never arrives or the items in question are faulty or not as described.

Start by writing to the agency asking it to either remove or change the entry that you think is wrong. It will investigate the matter and find out whether you have been the victim of ID theft or a bank's mistake.

Within 28 days from receipt of your letter the agency should tell you how the bank has responded. If the bank agrees to change the entry, they will authorise the agency to update their records. They should also send updates to any other credit reference agencies they use.

You can also contact your lender directly to query a mistake. If the lender agrees to the discrepancy, ask them to confirm this in writing on their letterhead and send a copy to the agency, asking them to update your file.

The FOS settles disputes between financial companies such as banks and consumers.

If a financial organisation rejects a complaint you make about its services, you can therefore escalate that complaint to the FOS - as long as you have given the company in question at least eight weeks to respond.

The FOS will then investigate the case, and could force the company to offer you compensation should it see fit.

Bailiffs are allowed to take some of your belongings to sell on to cover certain debts, including unpaid Council Tax and parking fines.

They can, for example, take so-called luxury items such as TVs or games consoles. However, they cannot take essentials such as fridges or clothes.

What's more, they can only generally enter your home to take your stuff if you leave a door or window open or invite them in.

You are therefore within your rights to refuse them access and to ask for related documents such as proof of their identity. If they try to force their way in, you can also call the police to stop them.

Private sector debt collectors do not have the same powers as bailiffs, whatever they tell you.

They cannot, for example, enter your home and take your possessions in lieu of payment.

In fact, they can only write, phone, or visit your home to talk to you about paying back the debt. As with bailiffs, you can also call the police if you feel physically threatened.

Thanks to the Distance Selling Regulations, you actually have more rights buying online or by phone than on the High Street.

You can, for example, send most goods back within a week, for a full refund (including outward delivery costs), even if there's no fault.

You will usually need to pay for the return delivery, though. The seller must then refund you within 30 days.

We enter into contracts all the time, whether it be to join a gym, switch energy supplier or take out a loan.

In most cases, once you've signed a contract, you are legally bound by it. In some situations, however, you have the right to cancel it within a certain timeframe.

Credit agreements, for example, can be cancelled within 14 days. And online retailers must tell you about your cancellation rights for any contract made up to stand up legally.

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