Legal Battle Looms: UK Energy Firms Face Financial Fallout Over Mis-Sold Business Energy

The ‘Big 6’ Energy firms in the UK are facing significant financial repercussions as legal action looms over mis-sold business energy, drawing comparisons to the infamous PPI scandal.

Businesses of all sizes are taking legal action against major energy suppliers, including British Gas, Total Gas & Power (TGP), EDF, and Scottish Power, over long term deals signed since 2000 (Parsley, 2023).

At the heart of the claims is the discovery that brokers, involved in these deals, received undisclosed commissions from the energy companies without their clients’ knowledge. The impact of these undisclosed commissions has been staggering, with businesses enduring inflated annual bills.

Ultimately, it is the energy companies who are the ones accountable for adding a hidden fee to the energy bills of customers, which they then give to the energy intermediaries. As a consequence of this practice, customers end up shouldering the expense of these commissions without being informed.

Reports suggest that in certain cases, broker commissions constituted almost half of the total energy costs for these firms, resulting in substantial financial burdens.

Business Energy Claims believes the gravity of the situation is similar to that of the PPI mis-selling scandal and predicts that millions of businesses could potentially seek compensation, there are plans to launch test cases over the coming months, paving the way for affected businesses to reclaim the commissions they unknowingly paid.

Business Energy Claims have been lobbying the government to bring changes to the industry and in early 2022 submitted a damning body of evidence to the Department for Business, Energy and Industrial Strategy, to the energy market.

Manchester Mayor Andy Burnham has publicly supported action against these energy companies. He told i: “This announcement will be welcome news for those hospitality businesses in Greater Manchester and across the UK who have been locked into untenable and unfair energy contracts”.

Have I been mis-sold a business energy contract?

If you suspect that you have been mis-sold a business energy contract, there are several signs to look out for. Here are some common red flags that could indicate a mis-sold energy contract:

  • No disclosure: No or limited information was provided relating to an “uplift” or reference to how the broker made their money.
  • High-pressure sales tactics: Aggressive or misleading sales tactics used to rush you into signing without adequate review.
  • Lack of transparency: Unclear contract terms, inadequate explanation, or failure to provide a copy of the contract.
  • Refund offers with conditions: Energy brokers offering refunds in exchange for waiving future claims against them.
  • Poor customer service: Difficulty contacting or unresponsive energy supplier/broker.
  • Early termination fees: Excessive charges for terminating the contract early, indicating potential mis-selling.
  • Unexpected bill changes: Sudden unexplained increases in energy bills may indicate hidden fees or rates in the contract.

How to make a claim?

In order to seek compensation, please contact us so that we can evaluate if any commission has been disclosed in your agreement.

Kindly provide us with details about your energy supply, including the unique MPAN or MPRN, the name of the energy supplier, and the contract start and end dates. Additionally, include information about the type of metre you have, along with the current unit rates and standing charges. 

It is possible to make claims for business energy agreements, regardless of their status as ongoing or past. Hence, if you have encountered mis-selling in the past, it is recommended to investigate the choices at hand.

If you think you have been sold a business energy contract incorrectly, it is important to act. This could result in getting compensation or paying less for energy.

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