I regretted switching power companies - am I being ripped off?

Tuesday, 16 October 2018

In 2017 I switched from Contact Energy to Flick, didn't like the set-up, and after about four weeks switched back to Contact anticipating a return to my previous plan. I was informed this was no longer available and was obliged to accept a similar but more expensive option. Do you think I can go back to them and ask for a explanation? Any advice you can offer would be much appreciated.

Usually, the vaguest hint that you might switch to a new provider is enough to prompt an electricity company to rustle up a great deal. It's interesting that this wasn't the case for you.

Jessica Wilson, who is head of research at Consumer NZ, says retailers can and do change their plans, so it's not necessarily surprising that your previous plan was no longer available.

But as long as you have not signed a fixed-term deal, it's worth seeing if you can get something better.

She says you should check out what other providers can offer you and switch if you can find something better. 'If Contact wants to keep his custom, it may be prepared to match the price.'

I am working with a young adult who has a disability (intellectual), but who with help can manage her money.  She does not have a credit card.  This young woman also has some other brain issues that mean when she has a high level of emotion she is very impulsive. 

When calm she is clear she does not want to get into debt, but when the home sales people call and offer her credit she gets excited and buys things.  Then when she calms she realises she is in more debt and could have got the materials or whatever she bought cheaper from another venue. 

She will also call herself when she is lonely and rack up debt.  She is currently in more than $3000 debt and due to being on a disability benefit can only pay for the interest.  I would value ideas.  She has been trespassed from the local budget support service as she has had a second signatory set up before and when she wants her money she can get very aggressive and abusive.  Because of her brain functioning, I'm not sure if she will ever be able to be 'in control' of this.  She is open to having legal help and I am following up with the local community law agency to see what they can suggest, but any ideas would be welcome.

There is a five-day cooling off period in the law for uninvited sales, so she can back out within that time if she changes her mind about a purchase that she was approached to make.

But when it comes to the instances where she's instigated the deal, it's a bit trickier. I asked Lyn McMorran, chief executive of the Financial Services Federation.

'This young woman would clearly come under the definition of a vulnerable borrower and therefore extra care to ensure suitability of loan product, affordability and her understanding of the terms and conditions should be being taken by the lender but she wouldn't be precluded from borrowing because of her condition per se,' she said.

She said it might be possible to consolidate the existing debt on to a cheaper loan, but that will not stop your client from borrowing your money.

McMorran suggested looking at Debt Blocker - it's a voluntary system where people can log themselves as someone who does not want to take on any more debt. Lenders that subscribe to it then agree not to loan money to those people, even if they ask for it.

McMorran points out that the flaw is that lenders have to sign up to the scheme. 'The dodgy ones don't.'

Do you have a personal finance or consumer question you'd like answered? Email susan.edmunds@stuff.co.nz