Business Energy Claims
Over the past decade, many businesses have been charged over the odds for the energy they use.
If you used a broker to secure you the best deal for your business energy contracts, there is a high probability that you may have been charged an undisclosed commission and you could be entitled to claim considerable compensation.
When managing business overheads, it makes sense that you would be looking for the best deal for your gas and electricity. One way you may have done this is through the services of an energy broker or consultant.
Energy brokers can negotiate with different energy providers directly on your behalf, with the intention of securing you a better contract than you may have got, had you gone direct to the supplier yourself. In theory, you employ the broker to save you time and money.
There are an estimated 3,000 energy brokers (also known as ‘third party intermediaries’ or ‘TPIs’) that assist businesses by arranging energy contracts with suppliers. These brokers earn their commission by sourcing you the “best deal” for your business energy.
Following an investigation into energy brokers in 2020, the Office of Gas and Electricity Markets (OFGEM), found that businesses were too frequently being mis-sold business energy contracts.
The independent regulator indicated a number of scenarios in which business energy was potentially being mis-sold, principally revolving around a lack of transparency.
- Only offering you one business energy deal, after stating they would conduct a full-market review.
- Locking you into lengthy, multi-year contracts without making it clear at the point of sale.
- Hiding commission fees in the contract without disclosing this cost at the point of sale, nor documenting it in the contract itself.
The major concern at OFGEM is that some brokers may have recommended contracts that earn them favourable commission instead of representing the best interest of their clients. This often results in businesses being enormously overcharged while the broker earns huge amounts of commission.
Typically, the commission is added to the unit price charged by the energy supplier, which can often be much higher than it should be. This means that the commissions paid is linked to the energy usage and simply added to the business bill without being explained. This means the longer the contract and the higher the usage the bigger the commission will be. As any commission or fee, this is paid directly to the broker from the supplier and you may not be aware of the added cost of your contract.