Ofgem to set out plan to tackle rogue energy suppliers

Ofgem will this week set out a plan to tackle bad behaviour by energy suppliers towards their customers.

The energy regulator said it had completed “the most detailed ever review” of the non-domestic market following months of complaints from businesses.

It follows growing outrage over the payment of hidden commission fees to brokers, which in some cases inflated customer’s energy bills.

A coalition of business groups including UKHospitality, the British Retail Consortium and the Independent Care Group have signed an open letter calling on Ofgem to take “immediate” action on the issue.

Non-profit energy consultancy Box Power CIC, which organised the letter, said it had seen one case where a commission fee of £12,000 had been applied to a £49,000 energy contract for a care home.

“[Now] businesses are incurring even higher energy prices, some brokers are adding even higher fees because they think they can get away with it,” said Corin Dalby, chief executive of Box Power.

Ofgem only made it a requirement for brokers to declare their commissions to ‘micro-business' customers, defined as firms with a turnover of less than £1.8m, at the end of last year.

However, the letter said Ofgem had “abandoned” larger businesses and organisations over the issue.

“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,” the letter said.

Ofgem said it had listened “loud and clear” to calls to protect businesses “of all sizes from sharp practice by energy brokers”.

An Ofgem spokesperson added: “We acknowledge their strong arguments about creating a level playing field with protections we’ve put in place for microbusinesses.

"We are setting out a comprehensive package this week tackling poor behaviour by energy suppliers toward exactly the customers who underpin our economy and society. This will include immediate actions we can take within our existing rules and where we might need stronger powers.”

More than 1,300 catering businesses have joined a legal challenge by law firm Harcus Parker against energy firms to try and reclaim hidden commissions paid to brokers.

A separate case is being put together by law firm JMW Solicitors and Sacha Lord, night time economy adviser for Greater Manchester, who described the challenge as a "David vs Goliath moment".

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