People who have just moved house are unwittingly handing over an extra £70 million a year to energy companies who trap them in uncompetitive deals before they have a chance to unpack.
Some sleuthing from Fool.co.uk has revealed that when the previous owner moves out and closes their account, the property adopts a standard tariff until its new occupants realise they are paying over the odds and sign up for a cheaper deal or switch energy provider
New homeowners are obliged to inform the energy company that they are the new occupants, but many households innocently sign up to the existing tariff when they move in without realising that they could be paying up to 25 per cent more than if they were on a different one with the same supplier.
Even those who get on the case as soon as they move in are still subjected this 'crafty tactic', because it can take up to four weeks after application to be transferred to a new tariff and for the cheaper rates to take effect – so the longer they wait, the more money they will be throwing away.
"New occupants should not delay in switching away from deemed tariffs, even if it means transferring to a monthly direct-debit tariff with the same lender first", said David Kuo, head of personal finance at Fool.co.uk.
With approximately 11 million Brits moving home each year, this amounts to 2.4 million households being enticed by utility providers
into signing up for expensive contracts, wasting £70 million a year, an average of £1,400 – based on switching within a month of moving in.
"Moving house is an expensive exercise. And the expense in moving can be made more costly if consumers unsuspectingly sign up to penal energy tariffs." Mr Kuo continued. "It can be easy to forget that you are on a deemed tariff when there are so many other things to remember at the time of moving house. But putting it onto the back-burner could burn a hole in your finances."
© Fair Investment