In today’s complex energy market, transparency is more important than ever. Yet thousands of UK businesses remain unaware that they may be paying hidden commissions to energy brokers, fees that are often embedded in their energy contracts without clear disclosure.
What Are Hidden Commissions?
Hidden or undisclosed commissions are fees paid by energy suppliers to brokers, also known as Third Party Intermediaries (TPIs), for securing contracts. These commissions are frequently added to the unit price of energy, inflating bills without the business’s knowledge.
In many cases, brokers fail to disclose:
- The exact amount of commission charged
- How the commission affects the total cost of the energy contract
- Whether the broker’s payment structure influenced the supplier or tariff recommended
This lack of transparency can result in businesses unknowingly paying thousands more over the lifetime of a contract.
Why Is This a Problem?
Energy brokers are expected to act in the best interests of their clients, offering impartial advice and securing competitive deals. However, when commissions are undisclosed, brokers prioritise their own financial gain over the needs of you and your business.
This practice is now widely recognised as energy mis-selling and recent court rulings have made it clear; businesses deserve full disclosure.
A Turning Point for Businesses
A landmark Court of Appeal ruling in 2024 has truly reshaped the legal landscape. The judgment confirmed that vague references to commission or reliance on “industry norms” are no longer acceptable. Brokers must provide clear, specific information about fees and their impact on contract terms.
The ruling also rejected common defences used by brokers and suppliers, such as:
- “The client should have known” based on market practices
- Contractual clauses attempting to exclude fiduciary responsibility
This decision empowers businesses to challenge unfair contracts and reclaim hidden fees.
How Widespread Is the Issue?
The energy broker market has grown rapidly, now valued at over £525 million in the UK. With more than 3,000 brokers operating nationwide, many businesses are exposed to unregulated and unethical practices.
Common red flags include:
- Brokers refusing to disclose commission details
- Contracts with vague or complex terms
- Automatic renewals without notice
- Pressure tactics to sign quickly
What Can Your Business Do?
If you’ve used an energy broker, it’s essential to review your contract and ask direct questions:
- Was commission paid to the broker?
- How much was it?
- Did it affect the price or supplier recommended?
If you suspect mis-selling, you may be eligible to claim compensation, even if the contract has ended.
Take back control of business energy costs, start your claim today.