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

Small business: how to chase late-paying customers
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
The pros and cons of the government's new Kickstart jobs scheme
Small business

The pros and cons of the government's new Kickstart jobs scheme

The government’s new work placement scheme, which provides funding for employers to offer work placements to young people, is appealing. But the red t…
11 Sep 2020
The cost to small businesses of the return to the office
Small business

The cost to small businesses of the return to the office

The costs of employees returning to the office may be tough for some small businesses to swallow, and there is financial support for back-to-work cost…
11 Sep 2020
Government opens up second round of help for the self-employed
Small business

Government opens up second round of help for the self-employed

The second round of the government’s SEISS scheme, which offers grants of up to £6,750 to self-employed people, is now open. Applications will be acc…
28 Aug 2020

Most Popular

Oil producers are back at their Covid-19 lows – is it time to buy?
Oil

Oil producers are back at their Covid-19 lows – is it time to buy?

With demand for oil hammered by Covid-19 and talk of “peak oil demand”, there are lots of good reasons to be bearish on oil producers. So, asks John S…
22 Sep 2020
The rising dollar is proving bad news for most other assets – will it last?
Investment strategy

The rising dollar is proving bad news for most other assets – will it last?

Precious metals, stocks and pretty much every other asset has taken a tumble as the US dollar strengthens. Dominic Frisby looks at how long this trend…
23 Sep 2020
Why you should stuff your end-of-pandemic portfolio with Chinese stocks
China stockmarkets

Why you should stuff your end-of-pandemic portfolio with Chinese stocks

For an end-of-pandemic portfolio, you need assets that can cope with today’s volatility. And that, says Merryn Somerset Webb, means Chinese stocks.
14 Sep 2020