Energy regulator to try and prevent mis-selling of energy tariffs by brokers

by Darwin on February 14, 2013

energy regulator powers

Small businesses throughout the UK constantly worry about paying too much for energy, but if research by energy regulator Ofgem is to be believed, some have been mis-sold deals by so-called ‘rogue’ brokers. According to the regulator, between 14-17% of firms who spoke to them were dissatisfied with the deals that brokers got them.

Among the concerns highlighted by Ofgem’s research by firms who talked to them were pressure put on them by persistent salespeople, cold calling and unprofessional behaviour on the part of brokers. In addition to that, Citizens Advice claim that as many as 42% of SMEs speaking to them expressed dissatisfaction due to brokers.

As a result of that, Ofgem are intent on asking the government to give them the power to help stop rogue brokers in their tracks. They hope that they can prevent persistent rogue brokers who mis-sell energy tariffs to firms that are more expensive than normal by being able to prosecute them.

“We’ve heard about brokers impersonating companies, lying about offering a cheaper deal and even forcing a switch of suppliers unwittingly. We hope that the government can help us to crack down on energy brokers who mis-sell to businesses by taking them to court”, said Ofgem’s Mark Wiltsher to the BBC.

Adding their voice to the general concern over the problem of energy brokers mis-selling tariffs to businesses, a spokesperson from Make It Cheaper explained the challenges businesses face in getting a good deal on energy.

“For any business to get on the best deal for its energy, it has no choice but to actively shop around for business gas with and so there’s certainly a need for more scrutiny over the behaviour of brokers as well as suppliers. Looking at the causes of dissatisfaction among those switching is a good start and will hopefully lead to it being a less arduous process.

“Too few businesses are prepared to engage in the market in the first place and so they end up simply being locked away on expensive tariffs. If they are given the confidence that switching is easy, without risk and will lead to a decent saving, then more will do so. That’s why we’re pleased to have been invited to join Ofgem’s Third Party Intermediary (TPI) working group which aims to establish how the role of brokers can be developed and regulated via an industry-wide Code of Practice”, they added.

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