Update (as of 26 April 2022): Good news in the fight to get full transparency for all businesses, with the UK’s Ofgem recently ruling that for microbusinesses a full disclosure of a broker’s commission must be provided on energy contracts from 1 October 2022 (in pounds/pence covering the duration of the contract).
But this is not just about commission. It is largely about the conduct of brokers generally, how complaints are managed, whether cold call phone calls are recorded properly, and generally a way for clients to complain about poor service from the sector.
From 1 December 2022, Ofgem will also be introducing a supply licence condition requiring suppliers to only work with brokers signed up to a qualifying dispute resolution scheme.
A microbusiness has been defined as one which uses no more than 100,000kWh of electricity per year, or no more than 293,000kWh of gas per year, or employs fewer than 10 employees (or their full-time equivalent) and has an annual turnover or balance sheet no greater than £2million.
Background to the call for evidence
This blog was originally published towards the end of summer 2021, following the UK government’s Department for Business, Energy & Industry (BEIS) releasing its Call for Evidence: Third-party intermediaries (TPIs) in the retail energy market. The BEIS intends to use its findings to inform the next steps on possible regulation of domestic and business TPIs.
“While TPIs offer services that are valuable to customers and the energy system,” opens the BEIS’s Call for Evidence, “there are concerns that the actions of some TPIs could lead to customer harm.”
Unsurprisingly, the document includes negative feedback on TPIs operating in business sectors, all of which is rather damning. Feedback includes a lack of transparency – undisclosed commission, undisclosed supplier relationships/preferences; bad practices – misrepresentation, misselling, inappropriate sales tactics, falsifying of documents; poor customer service; and lack of complaint handling procedures/dispute resolution.
At last! We’re delighted the UK government’s BEIS is finally taking action and calling for evidence. We believe that commission, in particular, should always be fully declared and included as a line item on customer invoices. For too long, hidden costs have hampered the energy market and caused dismay amongst customers.
The market needs to change.
We’re putting together evidence that we plan to submit to the BEIS.
We’re happy to include your feedback as well. What would you like the BEIS to do? Do you have any stories about working with TPIs, or have you had any bad experiences?
Alternatively, submit your own evidence by emailing EnergyTPI@beis.gov.uk