The energy sector is one of the most traded industries in the world, with billions of dollars at stake. In this high-pressure business environment, brokers play a critical role in connecting buyers and sellers, negotiating contracts, and securing the best deals. However, recent reports suggest that some brokers working in the energy industry may not have their client’s best interests at heart. One of the most significant concerns in the sector is a practice known as secret commissions. These are payments made to brokers by energy companies, often undisclosed to their clients. In this article, we will explore the issue of secret commissions in the energy sector, discuss why it is a problem, and highlight steps that can be taken to address this issue.
Why some energy brokers charge undisclosed commission?
According to recent reports, some UK energy brokers have been charging undisclosed commission to businesses seeking to reduce their energy bills. These secret commission payments have led to a legal claim and energy firms face £2bn legal claim for breaching transparency regulations.
An energy broker is a third-party intermediary that connects businesses with energy suppliers and helps them negotiate energy contracts. The brokers receive commission payments from energy companies for brokering business energy contracts with suppliers. However, some brokers are accused of not disclosing the commission payments to their clients, leading to inflated bills for businesses.
Law firm Harcus Parker is currently leading the litigation against British Gas and other energy companies on behalf of non-domestic energy customers who used brokers and passed on the cost to their customers without informing them. The law firm’s senior partner, Damon Parker, said that “the relationship between a broker and a business customer is separate from the relationship between the energy supplier and the business customer. The broker may receive commission payments from the energy supplier, but they must be clearly disclosed.”
Ofgem, the energy industry regulator, requires brokers to comply with transparency regulations and disclose any commission payments to customers. However, some brokers are accused of not complying with the regulation regarding transparency disclosures at all times. This has resulted in many large consumers of energy unknowingly paying more for their energy bills due to hidden commission payments.
Did your business suffer undisclosed commission?
As a business owner, it’s important to ensure that you’re not being charged any undisclosed commission by your energy broker or supplier. With the energy industry facing a £2bn legal claim for hidden commission, it’s crucial that you take steps to protect your business from paying more than you should for your energy bills.
Here are some steps you can take to check if your business is suffering from undisclosed commission:
Check Your Energy Contract: Start by checking your energy contract to see if there is any mention of undisclosed commission. If there isn’t, then it’s possible that your broker or supplier is taking a secret commission. Look for any language that could indicate that there may be hidden costs added to your bill.
Review Your Energy Bills: Review your energy bills carefully to see if there are any additional charges or fees that you weren’t informed about. If there are, it’s possible that you are paying for undisclosed commission. Make sure that you understand each item on your bill and ask your supplier or broker for an explanation if something seems unclear.
Consider Using A Different Broker Or Supplier: If you suspect that your current broker or supplier is charging you undisclosed commission, you may want to consider using a different broker or supplier. Look for a broker or supplier that is transparent about their fees and commissions and can provide you with a clear breakdown of your energy costs.
Seek Legal Advice: If you believe that you have been charged undisclosed commission, you may be able to make a legal claim against your broker or supplier. Contact a law firm that specializes in energy litigation, such as Harcus Parker or Leigh Day, to see if you have a case. Damon Parker, a senior partner at Harcus Parker, is leading the £2bn legal claim against energy companies for charging their business customers undisclosed commission.
Know Your Rights: As a business customer, you have certain rights when it comes to energy contracts and commissions. Ofgem, the energy regulator, requires brokers and suppliers to comply with regulations regarding transparency and disclosure of commission payments
Are you able to claim your money back?
In the UK, energy consumers who have been charged secret commissions by a broker or supplier may be eligible to claim back their money. Secret commissions are payments made by suppliers or brokers to third-party companies or individuals for selling their products or services to consumers, without the consumer’s knowledge or consent.
If a consumer has been affected by secret commissions, they should first gather evidence of the charges and the broker or supplier responsible for them. This could include bills, statements, or correspondence from the supplier or broker.
Consumers should then contact the supplier or broker directly to complain about the secret commissions and request a refund. They may also want to make a formal complaint to the relevant regulator, such as Ofgem or the Financial Conduct Authority, who may investigate and take action against the supplier or broker.
In some cases, consumers may need to take legal action to recover their money. They can seek advice from a legal professional or contact a consumer advocacy group such as Citizens Advice or the Energy Ombudsman for further guidance.
How to choose a reliable broker?
When it comes to choosing a reliable energy broker, it’s essential to be aware of the risks of secret commission and to take steps to protect yourself from potential issues. Here are some factors to consider when selecting an energy broker:
1. Choose an Experienced Energy Broker
Look for an energy broker with a proven track record of helping businesses find the best energy deals. A broker with extensive experience in the energy industry is more likely to have the expertise needed to navigate the complexities of energy contracts and supplier relationships.
2. Check Transparency Disclosures
Make sure the broker complies with the regulation regarding transparency disclosures at all times. Ensure they are transparent in all their dealings and clearly disclose all fees and commissions, so there are no hidden surprises.
3. Use a Broker who is Clear on their Fees
Look for a broker who is upfront about their fees and charges. They should provide clear and concise information on their fees upfront, so you know what to expect and can make an informed decision.
4. Research the Broker
Do some research on the broker before you engage their services. Check their reputation online, read reviews and testimonials from other businesses, and ensure they are licensed and regulated by Ofgem.