In a volatile energy market, many businesses turn to energy brokers to help secure the best deal for their energy supply. These intermediaries promise to take the hassle out of contract negotiations and find the most competitive prices. But what happens when things go wrong?
A common question we hear from businesses is ‘Can I get out of my energy contract?’. The answer isn’t always straightforward – especially when a broker has been involved. Many business owners are shocked to find themselves locked into long-term contracts they didn’t completely understand or even knowingly agree to.
Businesses operate in a non-regulated energy market. This means businesses are affected by fluctuating energy prices without a cap on the maximum amount they can be charged and have no protection. This leads to businesses being more vulnerable to rogue energy brokers who may provide misleading advice or inflate costs.
No cooling-off period for business energy contracts
Unlike domestic energy customers, businesses do not benefit from a statutory cooling-off period. Ofgem introduced a mandatory cooling-off period for domestic contracts – a 14-day window to cancel a contract signed. However, this protection doesn’t extend to business contracts, regardless of the size of the business.
This means that once a business energy contract is agreed, it’s typically immediately binding. That can be a huge problem if the business isn’t fully aware of all the terms. In fact, this is where some of the most troubling issues with energy brokers come into play.
Mis-sold energy contracts: A widespread problem
Unfortunately, the business energy market has long been plagued by mis-selling. Some rogue energy brokers operate without transparency and may hide commissions into the energy contracts. Their practices can leave small and medium-sized businesses locked into costly, unsuitable contracts.
Here are a few of the most unethical tactics commonly used by unscrupulous energy brokers:
- Lack of transparency about commission:
Many brokers fail to disclose how they are paid. It’s not unusual for brokers to receive significant commissions – sometimes hidden in the energy contract within inflated unit rates – without the business ever being made aware.
- Verbal agreements presented as quotes:
A business may believe it is only receiving a quote, when in fact the broker is recording the call as a verbal agreement to proceed. These calls can be used as evidence of a binding contract.
- Misleading information:
Some brokers exaggerate the urgency of securing a deal or make false claims about impending price increases to pressure businesses into quick decisions.
- Long-term contracts with punitive cancellation fees:
Businesses may find themselves tied into contracts of three years or more, with hefty penalties for early termination – something that may have never been clearly explained.
Verbal contracts can be legally binding
Many business owners don’t realise that verbal agreements are legally enforceable in energy contracts. If a broker records a phone call where a business owner or employee gives consent to proceed, it can be treated as a binding contract – even if you never signed anything in writing.
In practice, this can mean a simple ‘yes’ to the wrong question can commit your business to a multi-year energy deal. Worse still, you may not even know you’re in a contract until you receive the first bill or a welcome letter from the supplier.
This lack of written documentation, combined with the absence of a cooling-off period, makes it incredibly difficult for businesses to challenge or exit these agreements – without professional help.
What can you do if you’ve been mis-sold?
The good news is that businesses are not entirely powerless. If you believe you’ve been mis-sold a business energy contract – especially by an energy broker – you may be able to take action. Here’s what to look out for:
- Were you misled?
If the broker provided false or misleading information, failed to disclose commission, or pressured you into signing quickly, you may have grounds for a claim. - Were the terms explained clearly?
If the contract length, exit fees, or actual supplier were not fully explained, this may support your case. - Did you receive a copy of the contract?
If you never received written confirmation of the contract terms, or were unaware you had entered into a contract at all, that may indicate mis-selling.
Callum Thompson, CEO of Business Energy Claims, said: “Far too many businesses across the UK have been taken advantage of by unscrupulous energy brokers operating in an unregulated market. At Business Energy Claims, we’re here to fight for those businesses – to shine a light on unfair practices and help them reclaim money lost through mis-sold energy contracts. Whether it’s hidden commissions, misleading advice, or contracts you didn’t knowingly agree to, our team has the experience and determination to put things right.”
Prevention: know your rights
While it’s always better to prevent a problem than fix one, we understand that navigating the energy market can be confusing. Here are a few tips to protect yourself in the future:
- Request all contract details in writing before agreeing to anything.
- Ask the broker how they are paid – and get it in writing.
- Don’t be pressured into immediate decisions – take time to compare offers.
- Record your own version of phone calls if discussing contracts over the phone.
Getting out of a business energy contract is difficult, but not impossible. If you suspect that your business was misled, mis-sold, or pressured into a deal through an energy broker, don’t assume you’re stuck.
Business Energy Claims is here to help. Our experts can assess your situation and advise on the best course of action, whether that’s challenging a contract or recovering hidden commissions.
If you’re unsure about your energy agreement, get in touch with us on [email protected] or 0800 689 4259 for a free, no-obligation review. You don’t have to face this alone.