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22 September 2021 0 Comments
Posted in Dispute Resolution

The tell-tale signs your business has been mis-sold an energy contract

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Contributing authors: Nicola Radcliffe

Commercial energy brokers are not regulated meaning their conduct is not controlled by legal guidelines or codes of conduct. While many brokers do help companies to manage and improve their energy consumption at competitive prices, some “rogue” brokers are encouraging businesses to enter into poor-value deals with suppliers.

The suppliers then pay the brokers substantial commission which can be significantly above the market rate or stated commission rates.

In this guide we explore some of the tell-tale signs that may suggest your business has been mis-sold a commercial energy contract.

Has my energy broker received ‘secret commission’?

The commission is hidden from the client within the cost of the energy being supplied and brokers can receive upfront uncapped commission from some suppliers, thereby incentivising brokers to place business with them even if it is not the best value deal available to the customer at the time.

In addition to ‘secret commission’, mis-selling can also refer to the broker encouraging a business to enter into a contract which is unnecessarily long and therefore may not be in the customer’s best interests.

How do I know if I have been mis-sold an energy contract?

It can be difficult to know if you have been mis-sold to by your energy broker because they may not have provided information about how, or how much, they have been paid.  They may also have been misleading about the energy deals they are recommending to you and the true cost for “complimentary” services they offer.

Some brokers offer their services as ‘free’ to their customer without making it clear that they receive a significant commission from the contracts you enter in to. Even if you understood that they would get paid somehow, the true cost of those services may well be significant.

Brokers can claim substantial commissions which are hidden in these inflated supply prices and, once the contracts are locked in, will likely refuse to disclose how much they have profited from recommending the deal to you.

What action can be taken if mis-sold an energy contact?

As there are no regulations in place to protect businesses from these unscrupulous practices, businesses who have been mis-sold to must turn to the Courts by bringing a claim against the broker to recover their losses. It may also possible to claim against a supplier where they are complicit in the mis-selling.

This is where legal support is essential. We are experienced in winning complex disputes for businesses. We will work with you to explain how we can win cases like these on your behalf.

How can we help?

We have partnered with a reliable and trustworthy expert, with a wealth of industry knowledge who can help us identify whether your energy contracts have potentially been mis-sold.

If mis-selling is identified or suspected, then our team of experienced litigators can guide you through the process of bringing a claim against the broker from pre-action correspondence to issuing proceedings, if necessary.

How is your claim funded?

We can offer a range of funding options to allow you to pursue the claim including conditional fee arrangements or our in-house Third Party Funding and After the Event Insurance Facility. When you contact us we will be able to talk to you about these options.

 

If you have a question about your commercial energy contract then speak to Tom Llewellyn

07436 350 758     Email ustom.llewellyn@roydswithyking.com

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