Businesses need protection from energy mis-selling just like consumers argues legal group

Vulnerable businesses should be given the same level of protection as household consumers against energy mis-selling, argued legal advisory group Business Energy Claims (BEC).

The calls follow spiralling energy prices, alongside the recently published Consumer Protection Study, which highlighted the negative impact of malpractice by businesses such as energy-selling intermediaries.

BEC believes businesses can be just as vulnerable as consumers, with mis-selling jeopardising jobs, livelihoods, and the mental health of business owners and staff.

While the government’s study found that sectors such as retail were the worst-hit victims, it also showed consumers, and not commercial businesses, were most likely to take action against those mis-selling in the utilities sector. 

The energy market is a complex environment, with around 3,000 brokers selling energy solutions to businesses. 

Millions of UK businesses regularly use an energy broker to source their business energy needs, acting as a middleman between themselves and the supplier.

However, BEC has revealed it has discovered a significant number of examples of hidden charges and different forms of mis-selling, particularly into small and medium sized businesses across a range of sectors. 

The legal advisory group argued that without further protection, commercial enterprises could be vulnerable to malpractice from energy-selling intermediaries, with energy prices expected to rise further this coming winter.

Callum Thompson. director at BEC, told City A.M.: “Many businesses do not know what a good price for energy is, allowing for higher hidden commissions to be added. This, coupled with the threat of rising prices towards the end of the year, is resulting in many more businesses being mis-sold to.”

“Without government intervention through various legislations, small and medium enterprises are going to continue to be significantly hindered by energy mis-selling. SMEs are the invisible victims here, justifiably everyone is speaking about consumers falling victim; however, businesses need the same level of protection.”

Meanwhile, Ofgem claims 67 per cent of UK-based micro businesses SMEs have used an energy broker, BEC believes this figure is closer to 90 per cent,

It estimates 94 per cent have been mis-sold to and therefore could be eligible for money back on mis-sold energy contracts.

BES anticipates that those business are unwittingly paying a combined £16bn for their energy contracts that they could claim back. 

Thompson concluded: “It is time more was done to protect these businesses and help them recover funds so they can reinvest in their business and their staff. This could mean more jobs for teachers, nurses, more books for schools or to simply add value for shareholders.”