Any ideas on how to appeal to Flogas's better nature

Nickla

Hi all,

I'm not sure of if this should be in the business forum or consumer issues so mods please move if its in the wrong place.

I'm wondering if anyone has any advise on if there is anything we can do in this situation. Last year we signed up with Flogas for a fixed rate electricity contract for 14 months (this was a business account). We were aware there would be a break clause but at the time we saw now reason why we would be breaking the contract.

However circumstances changed and we sold the business and so we had to end the contract with Flogas after 11 months and they are charging us a €1500 fee to break the contract. This is a flat fee of €1500 to break a contract regardless of how far you are into the contract.

I know we agreed to this in our terms and conditions but it seems an extraordinary amount to charge - Our monthly electricity bill would be around €700 a month excluding VAT and there was 3 months left on the contract so as a result of us leaving, Flogas are only at the loss of whatever profits they would have made on the supply of just €2000 worth of electricity. I've phoned them and emailed to try to come to a more reasonable amount but they are insisting the full amount is owed.

I'm on Jobseekers at the moment and it would really kill me to have to hand over such an amount of money and get absolutely nothing in return for it. I'd welcome any ideas

Dr_Colossus

No ideas and not familiar with business accounts at all but what are the fixed costs per month? You mention €700/m ex VAT but would it be an option to pay the fixed costs for remaining 3 months with no electricity usage. Not sure if possible and meter readings would transfer to the new owners so you'd need some agreement from Flogas to not take meter reading but to continue charging the fixed costs until the end of the contract.

Alternatively only other idea would be for new business owners to take over your account and continue with Flogas to see out the contract but I guess that would need to be negotiated as part of the sale.

No idea how big a business you're talking about here but are there different break contract fees depending on size and expected usage? Seems ridiculous there is one flat fee of €1500 regardless if contract is broken in 1st month or 13th month especially since it's not a token amount of €50 like on domestic accounts.

Nickla

Thanks for the reply - I can't really tell from the bills what the fixed costs are but as the account is now closed I don't think there would be anyway to propose this, I have said to Flogas that I would be fine with paying a more reasonable fee that ensured that Flogas were not at a loss from me breaking the contract but they insist the full €1500 is owed.

We did look a the option of the new owner taking over the account for the remaining 3 months but Flogas wouldn't allow this and would only waive the fee if the new owner took out a new contract for 12 months - they got a better rate for electricity elsewhere so didn't want to sign up with them.

There doesn't seem to be different break contract fees depending on usage - its just a flat fee of €1500 to break the contract at any time. Other business like ours would have significantly higher electricity costs. Its a retail store so other businesses like ours could have a Deli or a lot more fridges/freezers to run.

I'm just hitting a brick wall with trying to deal with them.

ismat

If you sold the business was this cost not factored into the selling price ? It’s hard to see flogas giving money away by letting you out of a contract you willingly signed up to unfortunately

bartkingcole

Maybe offer to sign up with flogas for a residential account. Alternatively ring Joe Duffy or tell their press people you are doing this.

As above maybe taking out a residential account might suit them.

Honestly OP besides that just let them swing for it like? If you don’t have it you don’t have it.

Jim_Hodge

Would they not be seeking payment from a company that has ceased trading, as opposed to from you personally?

vicM

https://www.boards.ie/discussion/comment/121814032#Comment_121814032

Thats what I was thinking..if the Business has been sold off then the Energy contract has been sold alongside it or is this too simplistic a view

Nickla

Unfortunately we were sole traders and not a company so we are personally liable. Most people are telling me to just let them swing for it and I’m tempted but I hate owing anyone money and I’m worried it could affect my credit rating. Initially I had considered if we offer to sign up with them for a residential contract but their customer service has really put me off the idea although I might still consider it as a last resort.

i would love to have the confidence to go on the Joe Duffy show but realistically it’s not something I would be comfortable with.

We were aware that we would be hit with some costs when selling the business but the costs were a lot more than we expected. We are thankful that we were able to get enough money to pay off all our suppliers and recoup the money we personally invested in the business over the last few years. It’s just so hard for me to justify giving them so much money for supplying nothing and as I said before I’m ok with compensating them for any loss of expected earnings.

JVince

Business break costs are always quite high and usually it is pointed out to you fairly strongly.

On top of that you were probably paying way over the odds for electricity (energia have been under 20c for months)

I'd suggest a letter with a bit of a sob story saying you had to sell - it might get a better response.

Call centre staff simply follow procedures

Jim_Hodge

https://www.boards.ie/discussion/comment/121814180#Comment_121814180

Unfortunately it costs money to terminate a business. You sold the business and should have looked at all cessation costs when doing so...