Your business may be owed money due to mis-sold energy contracts
Have You Been Mis-Sold a Business Energy Contract?
Millions of UK businesses rely on energy brokers to arrange their commercial gas and electricity contracts. Energy brokers are often presented as independent experts who help businesses find competitive energy deals, acting as a link between your business and the supplier.
However, many businesses are now discovering that they may have been mis-sold their energy contracts.
If you’ve used an energy broker, hidden commissions may have been added to your energy rates without your knowledge. In some cases, businesses were not told how the broker was being paid, while others were given misleading information about commissions, contract terms, renewal arrangements, or the broker’s relationship with the supplier.
At Business Energy Claims, we help businesses investigate potential broker mis-selling and other business energy disputes. If you’ve suffered financial loss as a result of an unfair energy contract, you may be entitled to compensation.
More than 90% of the businesses we’ve spoken to have used an energy broker, and many were unaware that commissions had been added to their energy contracts. Our average business energy claim exceeds £25,000, with some claims potentially worth hundreds of thousands, or even millions, of pounds.
We believe that millions of UK businesses could have grounds to pursue business energy claims, and we’re here to make the process as straightforward as possible.
How Are Energy Brokers Mis-Selling Businesses?
Did your energy broker tell you exactly how much they would earn from arranging your business energy contract?
In our experience, many businesses are never provided with a clear breakdown of the commission included within their energy rates. Without full transparency, it can be difficult for business owners to understand the true cost of the contract they’re entering into.
Some brokers describe their service as “free” or explain that they receive an “introducer’s fee” from the supplier. While brokers are commonly paid by the supplier, those payments are often built into the unit rates charged to the customer. In reality, the cost is typically passed on through your energy bills.
The issue is not that brokers earn commission for introducing business. The concern arises when commissions, fees, incentives, or conflicts of interest are not properly disclosed, preventing businesses from making informed decisions.
Many businesses are shocked to discover that a substantial proportion of their energy costs may include broker commissions. When this information is hidden or unclear, it raises questions about whether the contract was sold fairly and whether the broker acted in the customer’s best interests.
If your broker failed to clearly explain how they were being paid, how much commission was included in your contract, or provided misleading information during the sales process, you may have grounds to pursue a business energy claim.
Common Types of Broker Mis-Selling
Broker mis-selling is not limited to hidden commission claims. Businesses may have grounds for a claim where a broker has:- Failed to disclose commission arrangements.
- Added excessive or undisclosed commissions to energy contracts.
- Misrepresented potential savings.
- Falsely claimed to be independent or acting on your behalf.
- Provided misleading information about contract terms.
- Arranged contracts without proper authority.
- Switched suppliers without informed consent.
- Failed to explain automatic renewals or termination requirements.
- Given inaccurate information about energy rates or contract lengths.
Every case is different, which is why our team reviews each matter individually.FAQs
But my broker saved me money!
This is quite often the case, but this does not determine whether or not you have a claim. In a lot of circumstances it is conceivable that a broker can save you money because of the excessive deal you were on previously, but there can still be a substantial amount of hidden commission resulting in a claim.
Why is the term of the contract so important?
Usually brokers tend to persuade clients to take a longer-term contract than short term, and in doing so claim that the market is likely to increase during this time. However, brokers are motivated to sell longer-term contracts and they are more appealing to them because the commission is multiplied by the length of the contract, usually representing a larger claim amount.
Surely if this was the case the regulator would step in?
Unfortunately, energy brokers are not regulated, and OFGEM have no powers (at present) to deal with them. We are pushing the likes of OFGEM, Citizens Advice etc to enforce a code of practice, and regulate the industry, but in the absence of regulation, we are looking to push for financial redress for businesses that have been mis-sold to.
I’m sure that if they didn’t tell me how much they earned it wouldn’t be much anyway?
That could well be the case and usually clients perceive that brokers do earn a negligible sum that does not affect their energy costs. However, our average claim amount is over £25,000 and this can extend to significantly higher. Our experience tells us that clients are usually shocked to find the true extent of the undisclosed commission amounts.
My financial director checked everything, there’s no way they could have been mis-sold to!
Because of the misrepresentations that can be made and the way in which brokers can mislead, even the most astute finance directors and teams can be mis-sold to.
Brokers aren’t charities, they may not have told me about their commissions but I assume it’s there!
We completely agree. Ultimately energy brokers are businesses and ought to be paid. However, generally brokers are paid by adding a margin to your rates which can occupy a significant proportion of your energy spend and according to the duties that they owe to you, they ought to fully and frankly disclose this to you and the amount of their commission.