Your business may be owed money due to mis-sold energy contracts
Have you been mis-sold to?
Millions of UK businesses regularly use an energy broker to source their business energy needs, acting as a middleman between you and the supplier.
If you’ve used an energy broker, they may have added hidden commission into your energy contracts without clearly explaining it.
Energy brokers legally have to disclose any commissions earned, but over the years many have made misleading statements or concealed their financial incentives.
Over 90% of the businesses we’ve spoken to have used an energy broker and our average claim is over £25,000, with some businesses entitled to millions of pounds in energy compensation.
We believe there are upwards of 2 million businesses entitled to compensation, and we’re here to make your energy claim as easy as possible.
How are energy brokers mis-selling?
Did your energy broker tell you how much in total they made from arranging your business contract? In our experience most don’t, and there’s normally a good reason for that. Brokers know that if they had to fully disclose they would not make anything like the kind of commissions they do if they were transparent, after all would you sign up to a deal if you knew a significant chunk of your bill was going to your broker?
They may even have told you that the service was free, or that the broker got their commission from the supplier as an “introducers fee” or words to that effect.
Typically, most brokers receive their commission directly from the supplier they place you with, and it is built into the unit price they arrange for you. Often, this is not disclosed to the customer.
Here’s an example of how it works
Approximately 67% of UK companies use a broker for their energy deals. Here is their commission model:
Example: 2 year energy contract agreed, broker includes 1p per KWh in rate, annual consumption of energy was 512,091. Total commission paid to broker = £10,241.82.
Example: 5 year energy contract agreed, broker includes 0.40p per KWh into rates. Annual consumption is 716,082. Total commission payable £14,321.64.
Our claims range from
£2,000 – £1,800,000
These are the most common comments we receive around TPI mis-selling:
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.