Monday, 28 March 2011

Madrid files complaint against electricity companies for lack of information and estimated billing

MADRID (Agencies) The Community of Madrid has opened disciplinary proceedings amounting to €3.87 millions against three power companies. It accuses them of violating the rights of residents to receive sufficient and effective information, as well as issuing bills based on estimations, which is, according to Madrid, against its law on consumer protection. The measure urges the companies to issue bills on real readings, and to make the bills more understandable. The accusations are based on the Ley General para la Defensa de los Consumidores y Usuarios, which qualifies as abusive, and therefore illegal, those contractual stipulations that charge for services or products that have not been used or consumed 'in an effective manner'. In addition, Madrid regulations bans 'transactions that impose unjustified conditions or charges on consumers'.>
The proceedings mean that the companies will have to return to their previous system of billing every other month, or to bill monthly with real meter readings. Another alternative is for billing to be made monthly, but charging only for the fixed charges such as meter hire.

Impossible bills

Given that Madrid consumer law specifies that "products, goods and services put at the disposal of consumers must incorporate, carry or allow for objective, efficient and sufficient information on their essential characteristics," the sanctions against the power companies refer, amongst other things, to the lack of clarity in their billing procedures, particulalry regarding the periods being billed, the basic rates, and, of course whether or not the reading is real or estimated.

The official complaint comes after several meetings between the Madrid authorities and the companies, when the nature of consumers' complaints as received by the region's consumer offices was discussed in detail.

The companies argued all along that there is a resolution from the Ministry of Industry that obliges them to bill monthly, a resolution that overrides more local regulations. In this respect, the Government of Madrid (PP) has repeatedly denounced that monthly billing was a way for the Ministry of Industry (PSOE, Government in power) to increase the real price of electricity.

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