What is business energy mis-selling?


In 2020, energy regulator Ofgem suggested a range of proposals designed to improve small businesses’ experience in the market. This was followed by the issuance of the Energy White Paper by the Department for Business, Energy, and Industrial Strategy (BEIS), which referred to the Ofgem review about the harm to small businesses from brokers and proposed that “Government and Ofgem will work together to ensure small businesses have appropriate protection from bad practices.” In June 2021, Ofgem consulted again, resulting in a decision to put in place measures that enhance the transparency around broker costs, cool-off periods, and a requirement that all suppliers only work with brokers subscribed to a qualifying alternative dispute resolution scheme. These measures, although helpful to small businesses when selecting energy suppliers, do not regulate brokers in the energy market.

Business energy mis-selling is an issue in the UK business energy market, with over 3,000 energy brokers and more than 40 suppliers all competing to offer the best deals to customers. Although most of the brokers are honest, some are unscrupulous and engage in malpractice. The sheer number of deals and suppliers can make it challenging for businesses to select the best option. Brokers can help to provide clarity, but some are deceitful and recommend deals that earn them the highest commission, which is hidden in the customer’s bills. Mis-sold commission is crippling for small businesses, and compensation claims can be as high as £25,000. Other types of mis-selling include presenting false deal comparisons or agreeing to contracts without consent.

Business Energy Claims estimates that 94% of the over two million micro-businesses in the UK have been mis-sold energy, with 90% unaware that they can make a claim. As a small business owner, if you have used an energy broker to secure energy deals, it is probable that you have been a victim of mis-selling.

What should I do if I suspect I’ve been mis-sold?

If you suspect that you have been mis-sold energy by a broker, there are a few things you can do.

  1. Firstly, you should gather any evidence you have that suggests you have been mis-sold. This could include emails or written correspondence with the broker or supplier, copies of your energy bills, and any other relevant documentation.
  2. Next, you should make a complaint to the broker or supplier. You can do this by phone, email, or letter. Be sure to include all of the evidence you have gathered, and clearly explain why you believe you have been mis-sold.
  3. If you are not satisfied with the response you receive, you can escalate your complaint to the Energy Ombudsman, which is an independent service set up to resolve disputes between energy companies and their customers.
  4. You may also wish to consider making a claim for compensation. There are a number of companies like Ariki Solutions that specialise in helping businesses to make claims for compensation for mis-sold energy.
  5. Finally, it is worth noting that if you are a small business and you have been mis-sold energy, you may be entitled to some additional protections under the law. For example, if you are a small business and you have been mis-sold energy by a broker, you may be able to make a claim under the Misrepresentation Act 1967, which allows you to claim damages for any losses you have suffered as a result of the misrepresentation.

In conclusion, while the energy market can be complex and confusing, there are steps you can take to protect your business from mis-sold energy. By being vigilant, gathering evidence, and making a complaint if you suspect you have been mis-sold, you can help to ensure that your business gets a fair deal when it comes to energy.

Ariki Solutions have been helping hundreds of businesses claim thousands of pounds back – why not start your claim for compensation with us today.

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