Retailer trade bodies have joined with other sectors to call on Ofgem to tackle hidden charges by energy brokers.
Organised by not-for-profit energy consultancy Box Power CIC, eight leading groups including the Federation of Independent Retailers, the Association of Convenience Stores, British Independent Retailers’ Association and the British Retail Consortium, have co-signed a letter challenging the energy regulator to act on hidden charges by energy brokers.
The groups warn that the problem has been allowed to continue unchecked for too long and that there is no reason for Ofgem to say that energy broker fees must be transparent for micro-businesses and the same not be true for larger SMEs and bigger organisations.
The letter stated: “this refusal to support the non-micro business community is costing businesses valuable funds when they can least afford it. It encourages unethical brokers to take advantage of businesses, enticing them to pay excessive commission fees which they have unknowingly agreed to.”
It warned Ofgem that if it “continues to fail the business community by allowing this exploitation to continue”, it will raise this directly with government to bypass the energy regulator.
The letter went on to say: “We do not agree that larger businesses are able to look after their own interests, that just because this is a long-standing arrangement that it should continue or that Ofgem are best placed looking at issues affecting microbusinesses only. A broker was easily able to add nearly £12,000 in commission onto a £49,000 gas contract for a single care home.
“This example shows how unscrupulous brokers are taking advantage of businesses that can ill-afford it, ultimately loading costs on to the customer who include some of the most vulnerable people in the UK. Many businesses and organisations have limited subject matter knowledge as they may only buy their energy every other year when needed.”
The letter states: “We do not agree that larger businesses are able to look after their own interests, that just because this is a long-standing arrangement that it should continue or that Ofgem are best placed looking at issues affecting microbusinesses only.”
Corin Dalby, the CEO of Box Power CIC, said: “For there to be trust, there must be transparency. They shouldn’t have to argue for support from the organisation created to protect all consumers. Rogue brokers are adding excessive commissions and all the while it is the end user who is paying for it.
“Transparency should be a given, so whatever the level of commission the business is fully aware and in agreement. Not only that but now businesses are incurring even higher energy prices, some brokers are adding even higher fees because they think they can get away with it. This is an extra burden on businesses at exactly the point they can least afford it. We refuse to stand by and allow this to continue and will do all we can to ensure this is brought to a stop.”
Muntazir Dipoti, The Fed’s National President, said: “Independent convenience retailers are the fabric of society and play a critical role in their communities, but with the cost of doing business soaring, many Fed members are struggling to stay in business.
“It is, therefore, critical that Ofgem takes action against these hidden charges to prevent even more retailers being left severely out of pocket.”
Andrew Goodacre, the CEO of the British Independent Retailers Association, added: “It is vital for all businesses to have transparency with their energy bills and any other costs associated with the supply of energy. The recent significant increases in the cost of energy have made this even more important.”
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