Over the past six months, we’ve had an influx of calls through our NFU Energy Service helpline from members that have found themselves with an unfavourable verbal contract without ever putting pen to paper. Sadly, this is becoming a regular occurrence and by the time the customer gets in touch with us, it’s too late for us to intervene and get them a better offer.

What is a verbal contract?

A verbal contract can be either, agreeing to supply rates over the phone or agreeing for a broker to sign a contract on your behalf.

Will it be clear that I’m entering a binding agreement?

Not always. Often they will read a passage of information with certain binding sections where you simply only have to say ‘yes’ or ‘ok’. It’s not always obvious that they’re doing this, so it is really important that you listen to everything being said as you could easily fall into a trap.

What are the risks of verbal contracts?

In normal circumstances where a customer is fully aware of the verbal contract and the rates, there is no issue. Verbal contracts can save both the customer and the supplier time and paperwork. Unfortunately, the system can be abused, leaving some of our NFU members unknowingly trapped in uncompetitive long term contracts.

Recently an NFU member from Lancashire contacted us for an energy contract. However, when we tried to secure it, the supplier told us he was recently placed in a contract for four years by another broker with rates a penny over what we could offer, as they claimed to have the verbal authority to sign on his behalf. When we told him this, he was unaware that he’d agreed to anything with the broker at all.

He said: “It really wasn’t clear that I was giving them the authority to sign a contract on my behalf. I had no idea until the supplier confirmed that I was stuck on such a high rate for four years. I’m still trying to get it cancelled but it’s proving near impossible”.

I think I’ve entered a verbal contract – what can I do?

• If you think you’ve only just entered the verbal contract, call the supplier or broker as soon as possible as there may be a ‘cooling off window’ where you can exit the contract.
• If you don’t think you agreed to anything verbally, you can ask the supplier or broker to send you a copy of the recorded call as evidence of this.
• Make an official complaint. Make a complaint in writing to state that you think you have been mis-sold a contract. If the complaint is with an energy supplier they have eight weeks to respond with a resolution or to send you a ‘deadlock’ letter. If the complaint goes into deadlock you can escalate the complaint to the energy Ombudsman here.

Does FEC Energy do energy contract agreements verbally?

No. We will only secure you into a contract once we have a signed letter of authority from you and a signed proposal to pass to the supplier. Occasionally we will sign on a clients behalf but only with their say so.

If anybody calls you about contracts claiming to be affiliated with FEC Energy or the NFU helpline and you don’t think it’s genuine, simply terminate the call and contact us to check. If it is us, we won’t be offended as we know it’s important for you to be cautious.