Energy regulator Ofgem has been slammed by trade bodies for allegedly not doing enough to prevent suppliers from charging more on bills to pay brokers’ commissions.
According to a coalition representing some 1mln UK businesses, gas and electricity suppliers charge billions extra on bills to pay energy brokers who sell their deals to customers.
These hidden broker fees should be disclosed, according to a letter signed by the likes of the British Retail Consortium, UK Hospitality and the Federation of Independent Retailers.
“If you continue to fail the business community by allowing this exploitation to continue, we will raise this direct with the government,” the letter said. “We cannot afford to wait for further reviews on this issue […] we have the support of some of the biggest voices representing the UK’s most hard-hit sectors.”
Ofgem responded that a package of new proposals would be unveiled later this week, set on tackling improper behavior in the business energy market.
This will follow Ofgem’s “most detailed ever review” of the market, the regulator said, and “will include immediate actions we can take within our existing rules and where we might need stronger powers.”
Lawyers Leigh Day and Harcus Parker have launched a class action lawsuit against energy suppliers over the largely unregulated practice of paying brokers commissions meanwhile.
Small businesses could be eyeing claims of up to £2bn from these hidden costs, the law firms suggest, with the “malpractice […] coming to light at a time when fuel costs are often what determines whether a company can survive”.