UK Energy companies face £2bn legal claim for energy mis-selling

Energy companies in the UK are facing a £2 billion legal claim from millions of businesses and community groups over allegations that they paid “secret commissions” to energy brokers and passed on the cost to billpayers.

The legal action alleged that that energy firms have inflated customers’ bills by billions of pounds by making payments to brokers without their customers’ knowledge. The firm also says that brokers have “deliberately targeted” community groups that were seen as “less sophisticated” to extract more in commissions. It was also found that some energy suppliers have allowed brokers to charge a commission of up to 10p per kWh, while others did not cap payments at all. It became a normal practice for these commissions to add between 1p and 3p per kWh to customers’ bills, which could total tens of thousands of pounds over the course of a typical contract. In 2021 alone, brokers were paid £380m in commissions, and this total could increase rapidly for 2022 as energy bills continue to rise.

Business owners also said they have been “hounded” by brokers when their energy deals have come up for renewal in a bid to pressure them to sign up to more expensive deals. The law firm, Harcus Parker, has already signed up several hundred claimants, has estimated that the average claim is currently around £20,000 per customer and that it is possible for long-term contracts for heavy energy users to claim over £1 million.

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