10 June 2015
The Market Court has forbidden 220 Energia Oy on 10 June 2015 from changing the invoicing interval or pricing of a contract with a customer without informing the customer about the change in the manner as required by law.
During 2014, the Consumer Ombudsman received reports about electricity sales and marketing procedures used by 220 Energia Oy, asserting that what was being done was in violation of the Finnish Electricity Market Act and the Finnish Consumer Protection Act. The company had changed the pricing pursuant to its electricity agreement, but had failed to inform its customers of the change, its grounds or the customer’s potential opportunity to terminate the agreement by giving notice in writing at least one month prior to when the change is to come into effect, as required by law.
220 Energia Oy had also deviated from invoicing every other month, as was stated in the agreement, rather sent invoices more frequently. Here too, the customers had not received any advance notification of this change in writing as required by law.
The billing interval for fixed-term contracts and the prepayable period had also been changed, despite to do so requires a change in legislation or a decision on the part of the public authorities.
In addition, 220 Energia Oy had charged its customers Value Added Tax at a rate of 24% for the period of use in January and February 2013, despite that the VAT rate of 23% should have been applied to invoices according to the tax administration’s instructions. This means that the company wrongly charged its customers too much Value Added Tax.
The Consumer Ombudsman commenced proceedings in the Market Court in order to obtain a resolution to the matter
Because 220 Energia Oy did not change its operating methods that were in breach of the requirements according to the applicable legislation and failed to return the excess VAT that it had charged its customers, the Consumer Ombudsman issued an injunction against the company on 12 May 2014. The company raised objections the injunction, which were rejected. The Consumer Ombudsman then commenced proceedings in the Market Court for a resolution to the matter.
The Market Court forbid, by a decision on 10 June 2015, 220 Energia Oy from changing the terms of the electricity supply contract between its customer and the company concerning the billing interval and the pricing without first informing the customer about the change, its grounds or the customers’ potential opportunity to terminate the agreement by giving notice in writing at least one month prior to when the change is to come into effect.
The billing interval of fixed-term contracts or prepayable periods cannot’ be changed either, unless changes in legislation or decisions on the part of the public authorities require it.
The Market Court found that the erroneous invoicing of Value Added Tax was caused by a single isolated mistake, relating to the changing situation of legislation, and did not ’order an injunction against 220 Energia Oy in this regard.
Notice of a EUR 50,000 conditional fine was issued, for potential violations of the injunctions.
The Market Court’s decision is not yet legally binding ,and an appeal can be lodged with the Supreme Court of Finland. The deadline for requesting leave to appeal against the decision and filing the appeal is 10 August 2015.
The Consumer Ombudsman commenced proceedings against 220 Energia in the Market Court (FCCA Press Release dated 15 July 2014)