The commercial energy market is unregulated and intermediated, with hundreds of new entrants into the market in just the past few years.
Business Energy Claims (BEC) was established to help businesses navigate this complex environment by better understanding the nature of the deals they have done with energy intermediaries and brokers and recover any monies they may have been overcharged.
BEC acutely understands the impact that price volatility continues to have on businesses of all different sizes. In an age of geopolitical uncertainty, and further risk of escalation in the Middle East, oil, gas and energy will remain an unstable commodity, globally.
In domestic terms, there is some price stability. The energy price cap limits the maximum amount energy suppliers can charge a household for each unit of gas or electricity used – and this clearly provides some guarantee for families. Although the domestic energy price cap limit has risen earlier this month, there at least remains that safety blanket.
However, businesses sadly are entirely unprotected to the vagaries of the market. There is no price cap in place for business energy, leaving companies vulnerable to soaring energy costs. In addition, they also remain exposed to mis-sold contracts, and hidden commissions from energy brokers.
Whilst there once was limited protection for businesses under the Energy Bill Relief Scheme, this expired in March 2023, and with the absence of a price cap for non-domestic energy, businesses are now facing unprecedented challenges.
Energy suppliers, without regulation, are in a position where they can pass their costs onto businesses. At BEC, we’ve seen quotes that exceed 70p per kWh for business energy – figures that can cripple many businesses, forcing them to make tough decisions about their future.
The Rising Cost of Business Energy
A lack of regulation means that businesses, from small independent shops to larger companies, are often hit with unexpected and crippling energy bills. Suppliers have the ability to pass on rising wholesale prices directly to their business customers, and this could happen with very little awareness on the business’ part.
In recent months, BEC has been contacted by numerous businesses struggling to survive under the weight of these costs. For some, these quotes are so exorbitant that they’re considering closing their doors permanently. BEC believes this is unacceptable. Without the safety of a price cap or a similar price threshold, businesses are exposed to volatile market conditions, with little support to help them weather the storm.
The Impact of Mis-Selling in Business Energy Contracts
In addition to the rising costs, businesses are also vulnerable to being mis-sold energy contracts. At BEC, we’ve handled countless cases where businesses have been locked into unfavourable contracts that they didn’t fully understand. With no cap or strict regulatory oversight, energy brokers can take advantage of the complex nature of business energy contracts.
One of the biggest problems we’ve seen is brokers hiding significant commissions in contracts. This is done by inflating standing charges and unit rates, leaving businesses to foot the bill without even knowing the actual energy costs and how much of their payment is actually going to the broker. In the current volatile market, where every penny counts, these hidden charges only make the situation worse. Many businesses believe they’re getting a fair deal, but in reality, they’re paying well above market rates due to these excessive broker commissions.
Are Energy Brokers Still Making a Profit?
The short answer is yes. While businesses are struggling to keep the lights on, some brokers are still profiting by embedding large commissions into energy contracts. This is particularly concerning as the energy market has become so unstable that determining whether you’re getting a good deal has become incredibly difficult. Many businesses simply don’t have the tools or expertise to understand the intricacies of energy contracts, making them easy targets for brokers looking to increase their profit margins.
At BEC we advise businesses to directly ask their brokers about commissions. If a broker refuses to disclose how much commission is included in the contract, it’s a red flag. Transparency is critical, and any lack of clarity in these contracts could be grounds for a claim. By understanding how much above market rates you’re being charged, you gain leverage in negotiations.
How Can You Tell If You’re Getting a Good Deal?
With prices rising and the market being more complex than ever, how can businesses ensure they’re getting a fair rate? The best advice we can give businesses is to shop around. Don’t settle for the first quote you receive. Use comparison sites, talk directly to suppliers, and don’t be afraid to consult multiple brokers. The more information you have, the better positioned you’ll be to negotiate a deal that works best for your business.
If you suspect that you’ve been mis-sold, there may be recourse. At BEC, we specialise in helping businesses reclaim losses from mis-sold contracts. Many businesses don’t realise they’ve been taken advantage of until it’s too late. If you’re in doubt, it’s worth having your contract reviewed by an expert.
Why Businesses Need Better Protection
The lack of a business energy price cap is a significant problem. Wholesale energy prices have been extremely volatile over the past few years, and businesses have been hit particularly hard. While domestic customers benefit from the security of a price cap, businesses are left to navigate this unpredictable market with no safety net. We believe it’s time for change.
Businesses deserve better protection. Whether that comes in the form of a cap on business energy rates or tighter regulations on brokers, something needs to be done to prevent businesses from being exploited. In the absence of such protections, businesses need to take proactive steps to protect themselves.
What Should You Do If You’ve Been Mis-Sold?
If you believe your business has been mis-sold an energy contract, don’t wait to take action. BEC has helped countless businesses recover losses from unfair energy contracts, and we can help you do the same. The first step is to review your contract and identify any hidden charges or unfair terms. BEC understands the complexities of the energy market, and we know how to identify the signs of mis-selling.
Conclusion: Businesses Deserve Fair Treatment
The business energy market is a difficult landscape to navigate, and without a price cap, companies are left exposed to volatile prices and potential mis-selling. BEC believes that businesses deserve better protection and greater transparency in their energy contracts. Until the government introduces stronger regulations, it’s up to businesses to stay informed, ask the right questions, and take action if they’ve been misled.
If you suspect that your business has mis-sold an energy contract, don’t hesitate to reach out to us. We’re here to help you reclaim what’s rightfully yours and ensure that you get a fair deal in the future.
If you believe you’ve been mis-sold your energy contract and think you’re entitled to compensation, call 0800 689 4259 or get in touch.