Consumer Ombudsman’s Newsletter 5/16 focuses on essential services

Consumer Ombudsman’s Newsletter 5/16 focuses on essential services
Essential services, such as district heating and water and electricity supplies, are regular expenditures for most households. The stability and predictability of essential services’ fees are key features of their tariff principles. During 2016, significant price increases have tested consumers but also the limits of legality, Consumer Ombudsman Päivi Hentunen writes in her editorial.

Consumer Ombudsman’s Newsletter 5/2016 is an essential services theme issue which includes Consumer Ombudsman’s decisions and statements regarding electricity billing, making of electricity contracts and changing the contract terms and electricity price increases. In addition the newsletter contains a story about updated general terms of supply for water which include guidelines for compensation during water outage. The newsletter also tells how new legislation is improving consumers’ possibility to have online banking credentials.

The Finnish Consumer Ombudsman’s Newsletter 5/2016 features the following cases:

• Ground rule to be sought for prices changes in essential services: In September 2016, the Consumer Ombudsman took to Market Court of Finland a case in which an electricity company, Finkraft Oy, raised the electricity supply contract of various consumers by approximately 40-60 per cent at one time. The issue was not an electricity supply product linked to the power pool price, but an ordinary ongoing contract in which a change in price can be based, for example, on changes in the supplier´s acquisition costs. A preliminary ruling is being sought from the Market Court on whether the suppler may make such large one-time increases in the price of long-term agreements such as electricity contracts.
• Bad credit record led to request for security deposit: The Consumer Ombudsman regards electricity supply as an essential service without which consumers cannot manage in modern society. For this reason, it is important to secure reasonable availability of the service for all consumers regardless of financial position or other personal circumstances. The Consumer Ombudsman has intervened in Suur-Savon Sähkö Oy´s practice of requiring a security deposit from a consumer when entering into a new electricity contract in the event that the consumer has a bad credit record.
•  Incorrect electricity invoicing must be rectified: Electricity is an essential commodity, and so the correctness and timeliness of the associated invoicing is financially important for consumers. Over a period of some 18 months, electricity invoices sent to consumers by Finkraft Oy have contained errors. Consumers have been invoiced twice for the same period of electricity use. The errors have been recurrent and have concerned several hundred consumers. The company has promised to rectify their incorrect invoicing by the end of 2016.
•  Paper electricity invoices must not be subject to additional charges: The Consumer Ombudsman intervened in the practice of six electricity companies (incl. Kotimaan Energia and Fortum) to charge consumers a fee for paper invoices. Under the Electricity Market Act, consumers are entitled to receive their electricity invoices free of charge, regardless of format.
• When does a water outage entitle to compensation? The Finnish Water Utilities Association, the Association of Finnish Local and Regional Authorities and the Finnish Competition and Consumer Authority have updated the general terms of supply for water utilities. The new terms of supply bring a number of changes and clarifications to the legal position of consumers using the services of a water utility. The Consumer Ombudsman supervises the legality of the terms of supply from the perspective of consumer protection.
• Online banking credentials finally available for everyone: Online banking credentials are not currently part of basic banking services and, for example, people who have bad credt record have experienced difficulties in obtaining credentials. The Consumer Ombudsman has highlighted this significant consumer problem for quite a time already. A change is finally on the way – with the Payment Accounts Directive in the implementation phase, the possibility to use online banking will be secured for everyone in the future
• Energy Authority monitors and promotes the electricity market: Director Antti Paananen from Energy Authority's Markets Unit describes in guest article Energy Authority's role in monitoring and promoting electricity market.

Consumer Ombudsman’s Newsletter is published 6 times per year.  Consumer Ombudsman’s Newsletter 6/2016, which will be published in December, is a  financial services theme issue. During 2016 theme issues about distance selling and communication services have been published.

You can find the previous issues here.