220 Energia Oy has changed the pricing and the invoicing interval stated in its electricity agreement without informing its customers of the issue in the manner required by law. The company has also charged its customers for excess value added tax.
At the turn of 2014, the Consumer Ombudsman received complaints on the operating methods of 220 Energia Oy. The company had changed the pricing of its electricity agreement, but had failed to inform its consumers of the change, its grounds or the consumers’ potential opportunity to terminate the agreement in writing at least one month before the change came into effect as required by law.
220 Energia had also deviated from invoicing every other month as stated in the agreement, and sent invoices more frequently. The consumers had not received any advance notification of this change in writing as required by law, either.
In addition, 220 Energia had charged its consumers value added tax at a rate of 24% for the period of use in January and February 2013, even though the tax rate of 23% should have been applied to invoicing according to the tax administration’s instructions. This means that the company wrongly charged its consumers too much value added tax.
Because 220 Energia did not change its operating methods that were in breach of the law and failed to return the excess value added tax it had charged its customers, the Consumer Ombudsman issued an injunction on the company on 12 May 2014. The company opposed the injunction, which became void.
The Consumer Ombudsman has now started proceedings in the Market Court for a resolution to the case. The Consumer Ombudsman demands the Market Court to prohibit 220 Energia from changing the invoicing interval or pricing stated in the agreement it has made with consumers without the company informing the consumer of the change, its grounds, and the consumer’s possible right to terminate the agreement in writing at least one month before the change comes into effect.
In addition, the Consumer Ombudsman demands that the Market Court prohibit 220 Energia from charging the consumer value added tax in excess of the requirements of the Value Added Tax Act and the instructions provided by the tax administration under the Act.
The Consumer Ombudsman also demands that the injunction be made more effective by setting a penalty payment of €100,000 on it.
Electricity company changes illegal terms of agreement
(Consumer Ombudsman’s newsletter 3/2014)