Business energy hidden commission claims refer to the undisclosed fees and commissions paid to energy brokers by energy suppliers. These fees are often added to the cost of energy contracts, resulting in higher bills for businesses. The practice of hidden commission claims has raised concerns about transparency and fairness in the energy market. Energy brokers are required to disclose all fees and commissions, but many businesses are unaware of these charges. As a result, some businesses may be paying more for their energy than they should be. Understanding these hidden fees and commissions is important for businesses to make informed decisions about their energy contracts and to ensure they are paying fair prices.

What is a business energy broker?

A business energy broker is a middleman who helps businesses find and secure the best energy contract with energy suppliers for their gas and electricity needs. They act as intermediaries between businesses and energy suppliers, helping microbusinesses and larger companies compare deals, negotiate contracts with suppliers, and secure the most favorable terms for their energy contracts.

How do business energy brokers make money?

Business energy brokers make their money by receiving commission from energy suppliers for securing and maintaining energy contracts. The commission is usually a percentage of the total cost of the energy contract and is added to the energy bill paid by the business.

In some cases, these commissions may be undisclosed and not clearly indicated to the business, leading to the practice of hidden commission claims.

Luckily, Ofgem, the regulator for the gas and electricity markets in the UK, requires energy brokers to disclose all commissions and fees. Additionally, Ofgem introduced a package of support wto make information on broker commissions clearer for customers. The new rules also introduces a 14-day cooling-off period for new deals.

Some unscrupulous brokers may not disclose their commission, leading to the mis-selling of energy contracts. This is why it’s important for businesses to choose a reputable energy broker and to understand their commission rates. Many businesses use energy brokers to help them find the best deal, but it is important to know that brokers may not always act in the best interests of the business.

How to choose a business energy broker?

Choosing a business energy broker can be a daunting task, but it is important to select one that will act in the best interests of your business and secure you the best energy contract. Here are some steps to consider when choosing a business energy broker:

Look for a regulated broker: Choose an energy broker that is authorised and regulated by a recognized regulator, such as the Solicitors Regulation Authority (SRA) in the UK. This helps ensure that the broker operates within a set of rules and standards.
Check for transparency: Ensure that the energy broker clearly discloses all fees and commissions, including any hidden commissions. This helps ensure that the broker is acting transparently and in the best interests of your business.
Compare commission rates: Ask potential brokers about their commission rates and compare them to ensure that you are getting the best deal. Brokers may receive commissions from energy suppliers, which can be added to your energy bill.
Get recommendations: Seek recommendations from other businesses that have used an energy broker. Ask about their experience and if they felt they received the best deal.
Consider the level of service: Consider the level of service that the energy broker provides, including the help they offer in negotiating with energy suppliers and securing the best deal for your business.
Read reviews and check for complaints: Read online reviews and check for any complaints about the energy broker. This can help you gauge the broker’s reputation and track record.
Look for a reputable broker: Choose a reputable energy broker that has a good track record of helping businesses secure the best energy contract. A reputable broker should act in your best interests and provide you with the best deal possible.

Pros and cons of using a business energy broker

Using a business energy broker can be beneficial for many businesses, but there are also some potential drawbacks to consider. Here we take a look at some of the pros and cons of using a business energy broker.

Pros

Expertise: Energy brokers have extensive knowledge of the energy market and can help businesses find the best deal for their energy contract.
Negotiating power: Energy brokers can use their negotiating power to secure better rates and deals for their clients.
Time-saving: Energy brokers can save businesses time by handling the process of searching for and comparing energy contracts.
Commission savings: Energy brokers can help businesses save money by reducing the amount of commission that is added to their energy bill.

Cons

Hidden commissions: Some energy brokers may receive undisclosed commissions from energy suppliers, which can be added to a business’s energy bill.
Unscrupulous brokers: Unregulated or unscrupulous energy brokers may mis-sell energy contracts, resulting in higher costs for businesses.
Lack of transparency: Some energy brokers may not disclose all fees and commissions, making it difficult for businesses to determine the total cost of their energy contract.
Limited choice: Energy brokers may only have access to a limited range of energy suppliers, meaning that businesses may not be able to access the best deal for their energy needs.
Legal requirements: Energy brokers must follow certain legal requirements, such as disclosing all fees and commissions. Businesses that use energy brokers must also be aware of these requirements and take steps to ensure that their energy broker is acting in accordance with the law.

How to avoid undisclosed commission when working with energy brokers?

By using the services on an energy broker, you can get a better deal on your energy supply. However, it’s crucial to ensure transparency and fairness in the broker-client relationship. Here are some tips that can help:

Research the Energy Broker: Look for a reputable and authorised broker who is regulated by the Office of Gas and Electricity Markets (Ofgem) or the Solicitors Regulation Authority (SRA) if they are acting as a solicitor.
Ask About Commission: Before agreeing to any contract, ask the energy broker about the commission they receive and if they are disclosing the commission to you.
Check Contract Details: Review the energy contract carefully to ensure there are no hidden fees or commissions.
Get a Quote: Get quotes from multiple energy suppliers and brokers to compare the total cost and commission rates. This can help you determine the best deal.
Get Legal Advice: Consider seeking legal advice if you’re unsure about any part of the contract, commission or fees.

Conclusion: Energy Contracts and Broker Commissions

In conclusion, using a business energy broker can offer several benefits, such as expertise, negotiating power, time-saving, and commission savings. However, there are also some potential drawbacks, such as hidden commissions, unscrupulous brokers, lack of transparency, limited choice, and legal requirements. To avoid undisclosed commission, businesses should choose a regulated broker that discloses all fees and commissions, compare commission rates, get recommendations, consider the level of service, read reviews, and look for a reputable broker. Businesses should also be aware of the legal requirements and take steps to ensure their energy broker is acting in accordance with the law.