Business Sales

How small businesses are being locked into long term bad value gas and electric contracts

Energy brokers around the UK have been using hidden business energy commissions to con businesses out of significant amounts of money

Businesses and organisations all over the UK are finding themselves trapped in bad-value business gas and business electricity deals, leaving them paying more than they should be for their energy.

According to energy regulator Ofgem, small businesses in particular are being conned out of upwards of £2 billion by rogue energy brokers. These brokers lock their customers into long-term bad value electricity and gas contracts that are hard to break.

Among the many organisations impacted by this are churches, charitable organisations and care homes, all of whom are paying far too much for their gas and electricity. As such, increasing numbers of organisations are making a mis sold business energy claim to try and reclaim the money that they’re owed from these unregulated brokers.

Unlike with residential or individual energy deals, business energy security is virtually non-existent. This is because business energy rollover contracts (and commercial energy deals in general) aren’t regulated by Ofgem in the way that domestic contracts are. Because of this, brokers can miscommunicate, withhold information and set fees without fear of consequence.

According to one claims management firm that is helping businesses to fight back against brokers, some organisations are owed pay outs of up to £1 million. No win, no fee specialists, Winn Solicitors, also highlights the severity of hidden business energy commission, helping clients claim rebates of between 10-20% of their energy costs through a mis sold business energy claim.

The extent of the damage from each mis sold energy contract is still being determined

Last year, Ofgem launched a call for evidence to determine just how far the damage of mis-selling in the energy market goes. The report says energy brokers consistently promise the best energy deals at no charge, but go on to offer poor-value deals picked because the suppliers offer the most lucrative terms for the brokers. This hidden business energy commission is costing small businesses significant amounts of money.

In fact, the report says that some brokers are claiming billions of pounds in hidden business energy commission due to inflated supply deals, many of which stretch over three to five years. In addition, many energy traders were found to be totally complicit, helping to hide the broker commission in their energy bills.

Under current regulations, even verbal agreements with brokers are binding for businesses. The number of brokers in the UK has risen dramatically to around 3,000, as outfits are cheap to set up and there are virtually no regulations in place.

The report from Ofgem includes case studies of unnamed companies that won significant sums for undisclosed commissions, including £10,000 for a care home, £8,200 for a charity and £3,200 for a church. One company with more than 200 UK sites was found to be owed £500,000 in hidden business energy commission through their mis sold business energy claim.

And experts fear that, without action, the misconduct of these energy brokers and suppliers has the potential to get worse, with business energy security become more and more jeopardised. The need for business energy claims has never been greater.

Legislation and regulations are needed as, without interference from the likes of Ofgem, brokers are unlikely to change their behaviour, and businesses will continue to suffer. A representative from Ofgem confirmed that a database is in works regarding the issue, and that these findings will be added. This will ultimately help micro-business consumers facing problems ensure that the market is meeting their needs.

In the meantime, a mis sold business energy claim is a must for any organisation that suspects it may have paid too much for its energy.

If you think that you may have been mis sold a business energy contract, get in touch with Winn Solicitors today by visiting

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