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.

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.

Recommended

The MoneyWeek portfolio of investment trusts – March 2023 update
Investment trust model portfolio

The MoneyWeek portfolio of investment trusts – March 2023 update

A decade ago we set up the MoneyWeek portfolio of investment trusts. It proved a success, says Andrew Van Sickle.
27 Mar 2023
Energy prices expected to fall in July - should you switch to a fixed energy tariff?
Energy

Energy prices expected to fall in July - should you switch to a fixed energy tariff?

Fixed energy deals are starting to make a comeback, with one major provider already offering it to existing customers - we look at how much they may c…
27 Mar 2023
State pension errors – women with husbands aged over 80 could be underpaid
State pensions

State pension errors – women with husbands aged over 80 could be underpaid

Some married women could be missing out on their full state pension, but the DWP has no plans to contact them directly. We explain how you can check i…
27 Mar 2023
Where will house prices go in 2023?
House prices

Where will house prices go in 2023?

We explore what could happen to house prices in 2023 as the market continues to slow down.
24 Mar 2023

Most Popular

Share tips of the week – 24 March
Investments

Share tips of the week – 24 March

MoneyWeek’s comprehensive guide to the best of this week’s share tips from the rest of the UK's financial pages
24 Mar 2023
Will energy prices go down in 2023?
Personal finance

Will energy prices go down in 2023?

Ofgem’s price cap is now predicted to fall below £2,000, based on average typical use, from July, for the first time since 2022. We have all the detai…
21 Mar 2023
Where will house prices go in 2023?
House prices

Where will house prices go in 2023?

We explore what could happen to house prices in 2023 as the market continues to slow down.
24 Mar 2023