Mis-Selling
Are Brokers Really the “Friend” you thought they were?
Unlike the domestic market, the business energy market is NOT regulated by OFGEM.
Energy Brokers have spent years convincing everyone that they can obtain the best Contracts on your behalf. In essence, it is mainly true… they just choose NOT to. Most of the 55 Suppliers who operate in the UK have a payment model whereby they pay these brokers the built in, hidden commissions as soon as you sign the Contracts.
This has led to a heavy reliance on energy brokers providing new business to the suppliers because it is more cost effective to outsource new client generation (they have no internal salesforce or offices to pay for and they only pay commissions that YOU are due to pay in your monthly bills).
Resulting in favourable terms being granted to performing Brokers to allow them to offer up to 5 year contracts without breaking down in writing the added commissions and fees.
Here is a Basic Example of Mis-Selling
If you spend £1000 per month on your energy, £200 per month is commission so every year, you are paying the Broker £2400.
If you signed a 5 Year Contract, the Broker got paid £9600 as soon as you signed, and then get another £2400 when your contract ends!
All well and good, however, this needs to be given to you in WRITING and EXPLAINED FULLY otherwise this is classed as undeclared hidden commission added without your knowledge or agreement.
Just ask yourself these questions…. “Did the broker show you in writing how much commission was built into the contracts BEFORE you signed?
Did you know in writing EXACTLY how much the broker made from your energy contracts.
If your answers are NO, then you have been mis-sold. GUARANTEED!
We can now recover from 20 – 50% of EVERY energy bill you have paid, because neither the broker or the supplier is allowed to keep a penny of this undeclared hidden broker commission.
How can you spot mis-sold energy contracts?
Usually, there are 6 main ways in which you can identify if a broker has mis-sold you an energy contract.
They are:
Broker Commissions
Non-Disclosure: If you did not know EXACTLY the amount your broker made from your contract, (Not just pence per kwh, the actual amount you pay through your bills) then you have been mis-sold. Do you know? Probably not!
Free Service - No Fees
If you did not pay a fee for their service, usually this indicates they took a percentage, leading you to believe this is a FREE service, allowing the broker to add undisclosed commissions to your contract. However, we have found in some cases still taking a commission and a fee.
No Supplier Contact
You weren’t given access to speak to the supplier directly when negotiating the contract. In some cases, unaware of the supplier before signing a new contract.
Limited Options Best Price
When an energy broker only gives you a few options for suppliers when they said they were giving you a thorough search of the market and best prices available without showing you the full supplier quote from the entire market. It is rare for an energy broker to give you the best price!
Long Term Contracts
The energy broker recommended long term contracts IE: Up to 5 years. Even when shorter term contracts are normally a cheaper option in the long run. The longer the contract the longer you are tied into the broker the more they earn.
Renewing In Advance Normally with The Same Supplier
Renewing the contract well in advance of it starting IE: 12 - 24mths, in order to secure “immediate” advance commissions, stopping you from shopping around. Selling you back to same supplier you are currently with. If you switch supplier, there is a possibility another broker can come in to undercut the deal.