Energy auctions

Recommendations for changes to electricity and gas suppliers

The Czech Trade Inspection Authority has seen an increased number of submissions concerning energy auctions and similar contracts, based on which a more advantageous supplier of electricity or gas is allegedly to be mediated. For example, consumers complain about the contractual fines they are charged if they sign a contract with such an “energy trafficker” but subsequently refuse to accept the finally selected energy supplier or they wish to withdraw from the contract.

Always pay attention to with who you are about to enter into a contractual relationship and whether you are sure that it is a trustworthy partner. Consumer prudence is essential and irreplaceable. Special care should be paid within unsolicited visits by door-step-sellers or unsolicited offers over the phone.

“Hello, show me your electricity bill,” this is how an unexpected visit to your home and the basis for future troubles may begin. From a door-step salesman who rang your doorbell, you’ll get a promise of energy savings if you sign a contract with him or issue a power of attorney. However, you often do not know which company is offered to you by this person asking you to sign and hence confirm in advance that you would choose such a new supplier after an energy auction, or an different tender that the trader promises to carry out. Moreover, if you subsequently change your mind about switching energy suppliers, the intermediary includes relatively high penalties in the contract. The aim of these “energy traffickers” is not to save your money, but to make money from you.

Sometimes these contracts are even concluded only for the purpose of subsequently claims of contractual penalties, or they result in the conclusion of a disadvantageous contracts with a new supplier, while this new supplier and intermediary are linked and agreed in advance.

Such intermediary contracts may show signs of unfair commercial practices or may contain disproportionate arrangements that are disadvantageous for consumers.

  • What to beware of?

The best way to save indeed is to reject door-step offers of “auctions” and “free gifts”. This does not have to be just about energy supplies. Door-step sales as such pose a serious risk to the consumer.

We recommend using official online energy price comparers, for example on the website of the Energy Regulatory Office:

https://www.eru.cz/cs/informacni-centrum/kalkulatory-srovnani-nabidek

You can then contact a specific energy supplier directly in your own way.

  • What can I do if I have already entered into an energy auction contract with a door-step seller?

In the case of a contract on selection of an energy supplier, concluded way from business premises, e.g. in case of door-step selling, it is your right to withdraw from the contract within 14 days from the conclusion of the contract. The entrepreneur cannot not connect this right with any sanction. The entrepreneur is obliged to inform you about the right of withdrawal. Otherwise, the withdrawal period may be extended up to a year and 14 days.

Before the expiry of the 14-day withdrawal period, the entrepreneur can start providing the service to you only with your explicit consent. At the same time, they must inform you of the need to pay a pro rata part of the price of the service used or of the complete loss of the right of withdrawal. Therefore, pay particular attention to the arrangements in the contract that would incluode your consent with the service provision before the end of the 14-day withdrawal period.

The withdrawal period starts running from the time of the contract conclusion. The next day after you entered into the contract, the first day is 14 days. If the end is on Saturday, Sunday or a public holiday, the period ends the next working day. Importantly, it is sufficient to (demonstrably) send the withdrawal to the entrepreneur on the last day of the 14-day period.

The law does not require a written form of withdrawal, but it can be strongly recommended for reasons of demonstrability. You can send the withdrawal to the address of the entrepreneur’s registered office or another place of business, or to their e-mail address. For the demonstrability of withdrawal, we recommend the form of the registered letter. Keep the proof of the shipment.

It is not necessary to state the reason why you decided to exercise your right of withdrawal. You can use the sample form that the entrepreneur must provide to you at the time of the contract conclusion. If you write the withdrawal on your own, do not forget to identify the contract and the entrepreneur to whom the withdrawal is sent. Clearly state that you are withdrawing from the contract within 14 days, specific sections are not necessary. Attach the date and your signature. If you also issue a power of attorney when signing the contract, we recommend that you explicitly revoke it. A template form of withdrawal from a contract concluded away from the business premises can be found in the Annex to this Recommendation.

Moreover, if the supply of electricity or gas itself is the subject of a door-step contract, and not only the mediation of a selection of a supplier, a special law allows the contract to be denounced no later than the 15th day after the energy supplies started.

  • Who can I contact?

The Czech Trade Inspection Authority is the surveillance authority in case of the use of unfair commercial practices by energy supply intermediaries, e.g. energy auction organisers. Contacts to individual regional inspectorates can be found on the website of www.coi.cz.

In consumer disputes with energy supply intermediaries, e.g. disputes over the payment of a contractual penalty in the event that you refuse to enter into contracts with the winner of an energy auction, the Czech Trade Inspection Authority is also the subject of out-of-court settlement of consumer disputes (ADR). However, it should be taken into account that within the framework of the ADR, the Czech Trade Inspection Authority cannot issue a legally binding decision on a private claim. More information about out-of-court settlement of consumer disputes can be found www.adr.coi.cz.

The supervisory authority for the use of unfair commercial practices by electricity and gas suppliers is the Energy Regulatory Authority. Contact details can be found on the website www.eru.cz.

The Energy Regulatory Authority is the body of out-of-court settlement of consumer disputes when the dispute is conducted with an energy supplier. In the context of administrative proceedings, the Energy Regulatory Office may also decide on the validity of a contract concluded with an energy supplier.

If door-step-selling is prohibited in your city or municipality by a decree and a similar “trafficker” with energy rings at your door, it is possible to contact the Municipality Police on the phone number 156.

  • What should I do if I received a gift, e.g. LED bulbs, during the conclusion of the contract and the entrepreneur demands a large amount for not returning them?

In general terms, the fact that the purchase contract for LED bulbs contains provisions excluding its dependence on the combined energy supply contract cannot deny that the contracts are dependent. In the event of an early termination of the contract for combined energy supply, the purchase contract is also automatically cancelled. From the professional point of view, it is not possible to expect that the consumer, if properly informed on the exclusion of the application of Section 1727 of the Civil Code, would accept all such effects. The contractual arrangement thus clearly fulfils the characteristics of an unreasonable arrangement, which is not taken into account under Section 1815 of the Civil Code.

Under these circumstances, the entrepreneur’s request to pay the increased price of LED bulbs can be assessed as unjustified.

Consumers are advised not to pay the requested price for LED bulbs, but consumers are obliged to return the bulbs. If it is no longer possible to return the lamps unused and undamaged, the consumer shall be obliged to refund the entrepreneur with an ordinary price of the lights or the price by which their value has decreased compared to the normal price. The ordinary price is not the price specified in the contract, but the price that would have been used within the sale of a similar item at the same time and in the normal course of trade. If consumers are still being contacted by entrepreneurs despite the above information, we recommend that entrepreneurs report this conduct to the Energy Regulatory Authority.

 

Czech Trade Inspection Authority

Advisory and Information Services Department

 

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