More than 700 households in England who are unable to access the UK mains gas grid are to be freed from “unlawful” LPG contracts, the competition watchdog said.
The move by the Competition and Markets Authority (CMA) followed concerns that the households in the North West of England who buy domestic gas from BDS Fuels had been automatically locked into repeat “exclusivity contracts” for LPG (liquified petroleum gas).
The CMA found BDS Fuels had unlawfully used a clause that automatically renewed over 700 households’ exclusivity contracts without their explicit consent.
Customers were required to pay a £350 fee if they wanted to break the contract and change providers.
This meant hundreds of customers in Cumbria, North Lancashire, and North Yorkshire were unable to switch to a new provider, who may have been able to offer them a cheaper or better deal, without paying BDS a fee.
LPG is an expensive domestic fuel used for heating and cooking by people who cannot access the main UK gas grid.
The CMA said BDS had agreed to remove unlawful automatic renewal clauses from its LPG contracts and inform all affected existing customers that they could switch supplier with immediate effect and without paying a fee if they chose to.
BDS had also agreed to refund those customers who paid a fee to be released from their LPG contract early.
Adam Land, from the CMA, said: “We are facing a cost-of-living crisis meaning it’s more important than ever that people can shop around and choose the best possible deal for them.
“If we find evidence of businesses preventing this, we won’t hesitate to step in – as we have with BDS Fuels.”
The CMA said it will monitor BDS to make sure it is taking the action promised, adding it could launch enforcement action if the firm fails to do so.
BDS Fuels declined to comment.