Beware the rogue energy suppliers

Ofgem has warned small businesses to be on their guard against rogue “energy brokers” flogging poor-value gas and electricity contracts.

Look out for rogue “energy brokers” seeking to sell small businesses poor-value gas and electricity contracts. That’s the message from Ofgem, the energy industry regulator, which has just launched an investigation into mis-selling to small businesses.

Ofgem’s probe reflects mounting concern about brokers claiming to offer free consultancy services to small businesses looking for a better deal on gas and electricity. In some cases, these brokers choose products and services from a small panel of suppliers that pay them the most generous commissions; very often the deals recommended are poor value, carrying high charges and often locking in small businesses for extended periods.

Subscribe to MoneyWeek

Become a smarter, better informed investor with MoneyWeek.

The scale of the scandal is potentially enormous. Ofgem estimates that of the £25bn spent on energy bills each year by small businesses, charities and public bodies, around half the money relates to a contract sold by a broker. As much as £2.25bn of the total spend is accounted for by brokers’ sales commissions, according to some in the industry.

Previous Ofgem investigations have rejected tighter regulation of energy brokers, but a growing number of legal cases where small businesses have sued brokers and secured high-value compensation payments are increasing pressure on the regulator to take action.



Small business

Small business: how to chase late-paying customers

Many small business have trouble getting their customers to pay up on time. Here's what you can do about it.
23 Jan 2020
Small business

Furlough: what does it mean and how does it affect me?

Many companies have “furloughed” employees after they have shut down because of the coronavirus. But what does furlough mean and how does the scheme w…
30 Mar 2020
UK Economy

It’s not all doom and gloom

In some ways at least, there’s never been a better time to launch a start-up, says Matthew Lynn. The government should help.
29 Mar 2020
Small business

Coronavirus: where the self-employed can turn for help

Freelancers and the self-employed should check what help they may be eligible for.
27 Mar 2020

Most Popular


What does the coronavirus crisis mean for UK house prices?

With the whole country in lockdown, the UK property market is closed for business. John Stepek looks at what that means for UK house prices, housebuil…
27 Mar 2020
UK Economy

The UK’s bailout of the self employed comes with a hidden catch

The chancellor’s £6.5bn bailout of the self employed is welcome. But it has hidden benefits for the taxman, says Merryn Somerset Webb.
27 Mar 2020

Coronavirus: what it means for your mortgage or your rent

Ruth Jackson-Kirby looks at all the key questions for owners, renters and landlords affected by the coronavirus crisis.
29 Mar 2020
UK Economy

Debt jubilee: will our debts be written off?

The idea of a "debt jubilee" – general society-wide cancellation of debt – goes back to Biblical times. Could it happen again? And would it really do …
28 Mar 2020