Are you a business that used an Energy Broker to save money? You may have been a victim of business energy mis-selling.
Rather than saving you money, it may have cost you money and you may be entitled to compensation for a mis-sold business energy contract by the energy broker.
Much like using a trusted insurance broker, many businesses have relied on energy brokers to try and save money on their gas and electricity bills. During this process energy brokers will often say that their services are free to their business customers, so using them appears to make perfect sense.
What the business energy broker may not have explained is that they will have received a hidden commission from the energy provider based on how much your business pays for its energy. As a result, many brokers inflated the cost of energy in order to make bigger commissions and in turn, the customer probably paid more in their energy bills than they should have.
How do I know if I have been mis-sold a business energy contract?
When signing a business up, the energy broker should have explained how much commission they were getting from the energy company. As a broker, and so an agent of the business, their job is to act in their customer’s best interests by finding and recommending the best deal for them, rather than recommending the energy provider with the best commission for the broker.
If you were not told by the broker how much commission they were going to receive for placing you with a particular supplier (also known as a ‘secret’ or ‘hidden’ commission) or the broker did not seek out the best deal for you, rather they sought the best deal for them, then you may be entitled to compensation.
Protecting businesses from unscrupulous energy brokers
To combat this unfairness to businesses, energy consumer watchdog, Ofgem has introduced a range of measures aimed at protecting business energy customers from ‘unscrupulous brokers’. When launching the initiative, Ofgem said:
"Two out of three micro-businesses use an energy broker when choosing their current energy contract and many of them benefit from the advice of a reputable broker. However, an Ofgem review found that in too many cases, microbusinesses are hampered by a lack of transparency when using brokerage services and end up being locked into poor value deals because they are not fully aware of what they are signing up to.
Ofgem found that a small number of micro-businesses were paying thousands more than they needed to in broker commission charges. These proposals will help all those using a broker to get value for money when using brokerage services."
What is a ‘secret/hidden’ commission?
This is where the energy broker recommends a provider but does not tell the business customer how much commission they are getting for it. They also fail to explain that the energy price has been inflated so they can make a bigger commission.
Because of the high risk of there being a conflict of interest (the higher the energy payments, the higher the commission for the energy broker), and to ensure full transparency for their protection, the extent of this commission should be explained to the customer by the broker. If the commission has not been explained, then the customer may be able to claim compensation for mis-sold business energy.
We can help
If you thought you were saving your business money by using an energy broker, and you were not told about any commission they were getting from the deal, then you may be able to claim compensation for business energy mis-selling.
We work closely with an established firm of solicitors with many years of experience in successfully winning cases for our clients. Get in touch with us to be introduced to our specialist financial mis-selling lawyers for a free no-obligation discussion about making a claim.
Ancojada Limited trading as Ancojada Group is not authorised or regulated to provide financial advice.
All financial advice is provided by other regulated businesses.