How Have People Been Mis-Sold Business Energy?

In 2020, 5.7 million micro-businesses were operating in the UK, accounting for 96% of all businesses. In a bid to get the lowest price for their energy supply, thousands of these businesses have utilised the services of an Energy Broker to act as a third-party intermediary (TPI) between themselves and the Wholesale Energy Provider.

While appealing new energy contracts negotiated by the Broker appeared to save the business a considerable amount of money, it has come to light that Brokers have failed to disclose hidden commissions and fees to the financial detriment of the business.

Failure to provide full financial details has led to thousands of businesses reclaiming the hidden commissions back from the Broker and, by way of vicarious liability, from the Energy Wholesaler themselves.

According to the energy regulator Ofgem, business energy mis-selling is a significant problem. Thousands of UK businesses are paying more than they should be on their gas and electricity bills. In 2019, Ofgem raised concerns about bad business practices carried out by energy brokers, consultants, and TPIs (third-party intermediaries). It was found that they had been hiding the amounts of commission they were receiving when selling business energy contracts to businesses.

Measures Introduced Include

• Transparency of brokerage costs
• Introducing a 14-day cooling-off period for microbusiness contracts
• Strengthening supply license obligations to provide information about brokerage costs
• Reinforcing rules around the supply of full contractual terms to ensure consumers receive full
  disclosure of financials

What Is the Average Business Energy Claim Worth?

All contracts are different, as are the amount of mis-selling and the level of the breach. As a rough guide, it is likely that we can recover and claim between 10% and 20% of your previous energy bills back from the broker or others who benefited from the energy broker’s mis-selling.

According to experts, the average claim is worth over £25,000. To illustrate how much claims can vary, an average claim value is £80,000 for hospitality companies compared with £240,000 for engineering firms.

How Can Phoenix Commercial Finance Help?

At Phoenix Commercial Finance, we understand the complexities of business energy claims and can provide the support and guidance you need to make a successful claim for compensation. We can help you to identify if you have been mis-sold business energy, calculate any losses you may have incurred, and make a successful claim for compensation.

Choose Phoenix Commercial Finance for a transparent, trustworthy partnership in managing your energy expenses and ensuring you are fairly treated in the business energy market.