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30 September 2022 | Comment | Article by Ria Coleman

Undisclosed commissions in business energy contracts – changes to businesses rights


As of 1 October 2022, there is a big change to a business’s right to access historic information on what commissions have been paid in respect of its energy contracts.

In March 2022 industry regulator OFGEM (the Office of Gas and Electricity Markets) published a long-awaited decision in which they outlined a package of reforms intended to help microbusinesses get fairer representation in the energy market.

These measures were intended to help bring an end to the unscrupulous and unethical working practices adopted by some brokers in the market including that of hidden commission charges.

There are an estimated 3,000 energy brokers (also known as ‘third party intermediaries’ or ‘TPIs’) that assist businesses by arranging energy contracts with suppliers.

The commissions paid to brokers is often calculated in a way which is linked to the energy usage and simply added to the business’ bill, without being explained. This means the longer the contract and the higher the usage, the bigger the commission.

Depending on the legal relationship between your business and the broker you may be entitled to claim compensation from your broker or the energy supplier that paid it commission.

So, what does this mean for small businesses?

Part of the aforementioned package of reforms is the provision of historical commission and contractual information, to maximise transparency.
In other words, energy suppliers from 1 October 2022, should upon request provide details of payments they have made or will make to brokers, via energy supply contracts.

I think I’ve been affected, what should I do?

  1. Make sure you keep all your contracts and paperwork and any electronic communication that you think might be relevant.
  2. Contact your energy supplier(s) and ask them to provide you with details of the commission paid / to be paid to your broker.
  3. Get in touch. Our experienced team will be able to advise you on the value and strength of your claim and handle all aspects of any claim for compensation.

Strict time limits apply for bringing claims, so if you believe that there were hidden commissions paid in respect of your energy contract, then you should bring a claim as soon as possible.

How much will I pay?

Our specialist team can represent you on a no win, no fee basis and all initial work to assess the claim will be carried out free of charge.
If the case does not proceed there will be no charge to you.

If you think that you might have been affected, please contact our Financial Mis-selling team today.

Author bio

Ria currently specialises in handling claims for financial mis-selling relating to pensions, mortgages and other financial products.

Disclaimer: The information on the Hugh James website is for general information only and reflects the position at the date of publication. It does not constitute legal advice and should not be treated as such. If you would like to ensure the commentary reflects current legislation, case law or best practice, please contact the blog author.

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