Rogue Energy Brokers ‘con small businesses out of £2bn a year’

Small businesses are being conned out of £2bn by rogue “energy brokers” who lock them into long-term bad-value gas and electricity contracts, according to documents submitted to the energy regulator.  Charities, churches and care homes are among the organisations paying far more than they should for their energy, after falling prey to the unregulated brokers, the documents say.

Some individual firms are seeking payouts of up to £1m, according to one claims management firm that is seeking legal settlements for small businesses against their brokers.  Ofgem plans to launch a call for evidence in the next few months to determine the extent of the mis-selling problem in the energy market.  The report, seen by the Guardian, says many energy market brokers promise the best energy deal for small businesses at no charge to their client, but go on to offer poor-value deals picked exclusively from suppliers that offer the most lucrative terms for the brokers.

A growing number of brokers can claim billions of pounds in commissions that are hidden in the inflated supply deals, many of which stretch over three to five years, according to the report.  Callum Thompson, the founder of Business Energy Claims (BEC) and a former energy broker, said 90% of micro-businesses using an energy broker may have fallen prey to mis-selling “in at least some form” because there is no official regulation in place to protect them.  He said energy suppliers were “completely complicit” because they help to hide the broker commission in their energy bills.  Thompson said it was not unusual for small business owners to be caught out by oral agreements which are binding under current regulations.

The number of energy brokers in the UK has ballooned to around 3,000, in part because the outfits are cheap to set up and face virtually no regulation, despite the large sums of money at stake.

Source:  (The Guardian; January 2020).  



Category: Energy, Utilities
Published: Tuesday, January 28th, 2020 at 10:48 am

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