Don't let the fear of early exit fees deter you from saving money on your household utilities
Switcher.ie is urging cash-strapped consumers not to let the fear of early exit penalties put them off seeking better deals on their household essentials.
If you want to leave your energy, broadband or mobile provider mid-contract you may well be aware that you could be hit with an early termination fee. However according to new research from Switcher.ie, up to two-thirds of household utility customers admit to being in the dark about the charges they could incur for leaving key household contracts early.
With early exit fees of up to €300 for some services it’s important to understand the terms of your contract before signing up and before deciding to leave early.
How long is my contract and is there a time after which I can leave?
Most contracts for energy, broadband and mobile are usually between 12 - 24 months. This is also known as the ‘minimum term’ for which you are locked in and not free to leave without penalty.
On what services can I be charged an early exit fee?
Most providers of household utilities charge early exit fees if you leave your contract before the end of the minimum term.
The only exception is if you choose to leave during the 14-day cooling-off period with these kinds of contracts - so if you sign up and then decide the service isn’t for you then you can usually cancel your contract during this time without any penalty.
Also, many companies will waive your fee if you’re moving house and sign up with them again at your new premises. You may also be eligible for penalty-free cancellation if the service is not as described or faulty.
How much can I be asked to pay for leaving early?
It really depends what service you are trying to cancel and how long is left on your minimum term.
For energy, most suppliers charge around €50 per fuel or €100 for dual fuel regardless of when you decide to leave within the minimum term.
For broadband and mobile it can be different. Some suppliers will charge a flat fee like to energy suppliers for leaving at any point during the minimum term, while others may charge the amount per month multiplied by the number of months remaining on the contract.
As fees can differ between utility service and supplier it’s always best to check your contract or contact your supplier to make sure you have a clear understanding of the fees you could be charged.
Are there shorter contracts available?
If you don’t like the idea of being locked into a contract there are some shorter contracts on offer for broadband and mobile services.
Virgin currently offer a 30-day rolling contract for €59 a month. It’s called the Freedom 240 plan and included is superfast fibre broadband and unlimited anytime calls to Irish landlines and mobiles. The freedom of this package is that you can cancel at anytime, granted you give Virgin a month’s notice of your intention to leave.
There’s also some great SIM-only deals out there as well which can help you save money and most providers only ask that you sign up to a 30-day contract - this also means you can cancel whenever you please as long as you give them a month’s notice.
Don’t be afraid to switch
Eoin Clarke, Managing Director of Switcher.ie says, “Everyone agrees that reading small print is not the most exciting task - but it is important. A lack of understanding about details on early exit fees, and the fear of being hit by these fees when switching, could be a ‘double whammy’ preventing more consumers from seeking out better value deals on their essential household services. In these cash-strapped times it’s a hurdle that people could do without, particularly as they could be losing out on significant cost savings.”
Just because you might get slapped with an early exit fee, doesn’t mean you will end up paying more if you switch. You need to look at whether the savings you could make by switching outweigh the early exit fee you may be charged. For example, if you’re thinking of switching your energy, there are savings of up to €290 to be had right now by changing dual fuel tariffs. If the early exit fee from you current supplier is €100 for dual fuel this means you could still save €190 on your energy bills. It’s definitely something to consider if you think you’re paying too much for your household utilities.