OFGEM plans to tackle unscrupulous energy brokers are a welcome step in the right direction

21 September 2020

For those of you who may have read one of my blogs before, you’ll probably know that I’m passionate about the fair treatment of not-for-profit organisations when it comes to buying their energy. Helping those businesses who do so much to help so many people who need it the most, is a privilege that we never take for granted at Utility Aid. Sadly, many other energy brokers don’t quite use the same lens.They are far too happy to simply rip off organisations who can ill-afford to be so significantly over-charged.

So, it is with tempered pleasure that I read about OFGEMs proposals to tackle unscrupulous energy brokers who provide services to the UK’s millions of microbusinesses. In any normal period of time, this would be welcome but, as we hopefully emerge from the pandemic, ensuring businesses get a fair service, for a fair price, has never been more important.Yet, this must be stage one. Our industry provides a financial service, so we should be regulated in the same way as others, such as investment firms and insurance businesses, are. Strict rules that ensure customers are treated fairly are a must.

And we are talking about big numbers here. According to data from the UK Government, there are over 5.6 million microbusinesses in the UK, which accounts for 96% of all businesses, equating to 33% of all employment. These proposals, if implemented, will have enormous, positive consequences for the UK economy.

I think it’s worth spelling out the details of the package of measures set out by OFGEM. They include the following:

Broker conduct principle: 

Introducing a principles-based requirement for suppliers to ensure brokers they work with conduct themselves appropriately.

Broker dispute resolution: 

Introducing a requirement for suppliers to only work with brokers signed up to an alternative dispute resolution scheme.

Informed contract choices: 

Applying targeted sales and marketing rules to suppliers and brokers they work with.

Broker commission transparency:

Clarifying and expanding existing supply licence obligations to provide information about broker commission payments on contracts, bills and account statements

Cooling-off period:

Introducing a 14-day cooling-off period for microbusiness contracts.

Contract extensions: 

Requiring suppliers to maintain existing contract rates for up to 30 days while a switch is being processed.

Banning notification requirements

Banning suppliers from requiring microbusinesses to provide notice of their intent to switch.


OFGEM also intends working collaboratively with leading consumer groups to improve awareness raising materials and information provision. 

As you can see, it’s a raft of positive recommendations that, quite frankly, should already have been in place. As far as I am concerned, the more transparency we have in the market, the better. And, this should merely be stage one. Full and unequivocal regulation of the energy market is, quite simply, a must. Without regulation I worry that many organisations will continue to be taken advantage of by those who seem only too happy to plunder the coffers of those who do so much good. 

Now, more than ever, businesses need support and to be able to trust the providers they deal with. Please be assured, we will be doing all we can to lobby for the introduction of these proposals and the complete regulation of our industry.

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