According to an exclusive public opinion survey commissioned by MND a.s. to map energy sector-related issues, as many as 86% of the respondents have heard of or personally encountered unfair practices, such as pressurization tactics, distribution of misleading information, and practices targeting senior citizens. Moreover, 20% of those asked confirmed to have been deliberately withheld or have received misleading information about contractual terms when signing contracts.
"A real liberalization of the energy market is yet to come in the Czech Republic. It will happen only when the quality of information provided to customers is substantially improved, making switching to a different supplier much simpler," commented the survey results MND's Marketing Director Jan Sýkora.
The survey, conducted for MND by NMS Market Research on a sample of 500 respondents, also showed that more than a half of those asked have automatic renewal clauses in their contracts.
MND believes that the main barriers that hinder greater market liberalization include the fact that information provided to customers is insufficient and that penalties charged by some traders literally prohibit switching from one supplier to another. "MND strongly disapproves of business models that profit from penalties and from the withholding of information. Considering the current situation in the marketplace, MND calls on market regulatory authorities to apply the Code of Ethics for Suppliers in a much broader and more commanding manner," declared Sýkora.
MND has formulated two specific proposals, both targeting the energy sector. The first is based on Section 24 of the current Code of Ethics, and MND advocates its incorporation into an Energy Act amendment that is presently on the drawing board. It will require energy traders to inform the customer, or the customer's representative, immediately upon request of the conditions for contract termination and of the cancellation deadline. At present, the bill that is to amend the Energy Act makes the provision of information on contractual terms conditional on the serving of a termination notice, which, again, limits customers who seek information prior to cancelling their contract.
MND's second proposal consist of introducing a legal duty requiring energy suppliers to inform the customer sufficiently in advance of the forthcoming end of their contract, including a notice of automatic renewal, and to specify the deadline by which the customer must make a decision without being penalized. "If customers receive the information well in advance, it will provide them with a sufficient amount of time to evaluate the pros and cons of products and services available on the market. That will prevent situations where customers become hostages of their disadvantageous contracts," added Sýkora.
Although 42% of the respondents use online comparisons when considering a supplier switch, only one quarter of them believe that they are genuinely independent," Sýkora said in commenting the survey results. The ERO recommends the tzb-info.cz comparison website, which receives price lists directly from the energy regulator.