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ENERGY

German government moves to end short-notice energy contract terminations

With thousands of customers currently left out in the cold by providers cancelling electricity and gas contracts at short notice, Germany is planning to introduce tighter controls on the energy sector.

Heat cost allocator on a radiator
A heat cost allocator, for calculating heating costs, on a radiator. Photo: picture alliance/dpa | Sina Schuldt

The government says it wants to put a stop to short-notice terminations of electricity and gas contracts by low-cost providers as well as sudden price hikes. 

“We must not leave consumers out in the cold like this again,” Oliver Krischer (Greens), Parliamentary State Secretary in the Federal Ministry of Economics, told DPA in Berlin. “This was and is a great burden for many people and a huge shock to suddenly find a notice of termination from the gas or electricity provider in the letterbox.”

Krischer also announced that the there would be uniform tariffs for basic energy supply in future, so that new customers do not face bills that are twice or three times as high as those paid by existing customers.

“Split basic-supply tariffs are in the end just make additional work for the courts, which we want to avoid,” he said.

Split tariffs are when an energy provider offers different rates for new and existing customers.

READ ALSO: How households in Germany can tackle rising energy costs

In addition, energy providers will have to give their customers several months’ notice if they decide to cancel their energy contracts so that people have time to look for a new supplier.

With energy prices soaring over the past year, struggling low-cost providers have cancelled thousands of contracts at short notice, leaving customers grappling to organise a new contract at an affordable rate. 

These consumers then tend to automatically move to the the so-called substitute supply with a basic supplier in their area – but often have to pay significantly more for this back-up service. 

The newly formed Ministry for Energy and Economics, which is run by the Greens, wants to stop this from happening.

Oliver Krischer (Greens) speaks in the German Bundestag

Oliver Krischer (Greens) speaks in the German Bundestag. Photo: picture alliance/dpa | Bernd von Jutrczenka

“There is a need for action,” said Krischer. “We therefore want to raise the hurdles for discontinuing supply and put the instrument of basic and substitute supply on a new footing.”

He added that the ministry would also make proposals on how dubious competitors could be better filtered out by the Federal Network Agency.

“The fact that around one million gas and electricity customers are being terminated within a very short time must not be repeated,” he warned. 

READ ALSO:

Split energy tariffs 

According to a position paper of the Federation of German Consumer Organisations, some new customers have found themselves paying up to €1,654  more per year in tariffs than existing customers.

This is because budget suppliers tend to purchase low-cost energy for their customers in advance to keep costs low in the long-term.

However, with prices rapidly rising due to supply issues and the effects of the pandemic, these same suppliers have been forced to secure more energy at significantly higher prices to cater to a higher-than-expected number of new customers. 

Therefore, some suppliers have started to differentiate between new and existing customers and to supply new customers at more expensive tariffs. In the view of the consumer centres, however, this is legally inadmissible, dangerous for fair competition and incomprehensible. 

READ ALSO: German local authorities demand reduction in energy prices

According to the Ministry of Energy and Economics, concrete proposals for amendments to the Energy Industry Act are now being worked out in close cooperation with the Ministry of Consumer Protection.

The aim is to provide more protection for consumers through clear notice periods before supply is discontinued and to improve the regulations on substitute supply and basic supply.

Vocabulary 

short-notice cancellation / termination – (die) kurzfristige Kündigung

basic supply – (die) Grundversorgung 

a huge burden – (eine) große Belastung 

to react to something – auf etwas reagieren 

We’re aiming to help our readers improve their German by translating vocabulary from some of our news stories. Did you find this article useful? Let us know.

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MONEY

Why are card payments getting rejected in Germany?

People are currently unable to pay by card in a number of major German retailers. Here's what's going on.

Why are card payments getting rejected in Germany?

Since Tuesday, numerous retailers in Germany have been operating under a cash-only policy after a major brand of card payments terminal stopped processing payments.

The problem was initially announced by the Konsum retail chain in Dresden, who wrote on Facebook on Tuesday morning: “Attention, an important notice for you! Due to a Germany-wide malfunction, card payments are currently not possible in our stores.”

According to the latest information from Focus Online, several branches of Netto, Edeka and a handful of Rewe branches are affected by the issues. There have also been reports of problems at Aldi Nord, Rossmann and DM as well as some smaller, independent retailers and petrol stations.

People who have tried to pay by credit card, debit card or EC card at these places have reportedly been turned away. 

What’s going on?

The problems with card payments seem to be linked to a commonly used card payments terminal from US company Verifone. According to reports, H5000 card machines at multiple retailers and businesses experienced a software malfunction that stopped them processing payments. 

“As things stand, it will be necessary to install new software updates on all H5000 terminals, which the manufacturer will provide as soon as possible,” the payment service provider Payone said.

“The disruptions are ongoing,” a spokesperson for financial services provider Concardis said on Thursday afternoon. “We’re still waiting for updates from Verifone.”

As of Friday morning, there was no indication of when the problems would be solved, but the card payments processor appeared to be working on a solution.

“We will soon provide a software update for our customers to fix the problem and will inform our customers as soon as it is available,” a Verifone spokesperson said. 

READ ALSO: How Germany’s EC card is set to go digital

How widespread is the problem? 

According to Verifone, thousands of card machines at different retailers, petrol stations and banks across the country are affected. The H5000 terminal is mainly used in Germany, they added. 

However, the Association of German Banks clarified that, though the H5000 terminals were completely out of action, this specific model only accounts for a small proportion of all card machines in Germany. 

“Network operators and technical service providers are working intensively on troubleshooting,” it continued.

Payments processing service Payone confirmed that it was facing issues with the specific H5000 card machine and said that the issues were happening throughout the country. 

“Like other network operators, we are currently experiencing considerable restrictions in the processing of transactions with card payment terminals of the type H5000 from the manufacturer Verifone throughout Germany,” Payone said on Wednesday. 

Financial service provider Concardis warned businesses not to try and fix the problem themselves by rebooting the devices since the card machines needed to be connected to the network in order for the problem to be solved by the manufacturer. 

He said Payone and Concardis were in contact with Verifone and were working to fix the problem.

What should customers do? 

Since card payments may not be possible, it’s a good idea for people to make sure they have cash on them when they go to the supermarket or petrol station in the near future. 

ATMs are apparently unaffected by the problems, so people should still be able to get access to cash. 

Customers are also being advised to clarify in advance at the checkout whether card payments are possible or not – preferably before picking out items.

If card payments aren’t possible, supermarkets and other shops are likely to put up signs at entrances or near the tills, so customers should keep an eye out for those. Petrol stations generally put stickers and signs directly on the pumps when equipment is out of order. 

If customers get caught out with no cash at a retailer where no card payments can be processed, they will generally have to leave the items behind – though some cashiers will be willing to hold the items for when the customers return. 

Things can get trickier at petrol stations, where identity cards, driving licences and health insurance cards can be retained in the event that somebody fills up their tank and is unable to pay straight away.

In some cases, the police can even be called.

READ ALSO: What to know about starting your personal banking in Germany

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