Ofgem has introduced the reforms on fixed term deals which bans suppliers from increasing the amount customers pay, or from making any other changes to fixed term tariffs “which are to the disadvantage of a customer”.
This new rule affects all fixed terms contracts entered into on or after 15 July this year.
The regulator has also banned suppliers from automatically rolling customers from one fixed deal onto another fixed terms deal.
The suppliers will have to place consumers coming out of fixed term deals onto their lowest price evergreen tariff from 31 March 2014.
They will also have to notify customers between 42 and 49 days before the end of their fixed deal, and during this period, suppliers will be banned from charging a termination fee.
Andrew Wright, interim chief executive at Ofgem, said: “In an era of rising prices it is vital that competition works as effectively as possible.
“Our reforms seek to give consumers the tools they need to find the best energy deal for them and to ensure that suppliers have to treat them fairly.
“Ofgem is going to make it easier for consumers to vote with their feet and for new suppliers to enter the market and take on the Big Six.”
He added: “Encouragingly suppliers have shown a willingness to start on this journey by signing up to our reforms and are now acting to implement them.”
Ann Robinson, director of consumer policy at Uswitch.com, said: “The greater protection and certainty over fixed price tariffs is especially important as, with price hikes on the way, we are seeing a mass movement towards these types of tariffs as consumers seek greater security.”
She added: “We will be monitoring the market to see whether these new rules inadvertently result in competitive deals being pulled as this would clearly not be in consumers’ interests either.”
The latest RMR reforms follow a new standard of conduct which was introduced in August, while tariffs reforms are sue to be introduced by the end of the year, and the dead tariff reforms – where suppliers have to move consumers off “expensive” dead tariffs onto their cheapest evergreen deal – will be enforced from June 2014.