Ofgem could close ‘protection gap’ for UK businesses

Greater powers for Ofgem to help businesses from brokers who mis-sell energy could help close the “protection gap” on energy issues in the industry. That’s the view of a consumer […]

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By Priyanka Shrestha

Greater powers for Ofgem to help businesses from brokers who mis-sell energy could help close the “protection gap” on energy issues in the industry.

That’s the view of a consumer group who welcomed the energy regulator’s call for the Government to give it more powers to take direct action against “rogue” brokers. Ofgem said it plans to add tougher rules for suppliers and is developing a code of practice for brokers to give businesses more confidence when using their services.

Adam Scorer, Director of Policy at Consumer Focus said: “There is a real protection gap on energy issues for small businesses. Many don’t have the resource or knowledge to tackle the confusing process and high-pressure tactics often encountered from energy salespeople. It is made even more difficult when businessmen and women may be trying to serve customers, run a shop or a pub and deal with a high-pressure sales pitch… With mis-selling a major issue leaving many small businesses paying over the odds, it is essential that this protection gap is closed.”

SmartestEnergy, purchaser and supplier of electricity also welcomed Ofgem’s call for tougher action. Head of Sales David Taylor said: “Reputable energy brokers can play an important role for business consumers in what is an increasingly complex market and we support tough action to deal with any cases of mis-selling and to ensure high standards of conduct.

“We would also be keen to see more transparency in the charging for services offered by energy brokers as we believe this would lead to a healthier market for business consumers and ensure a level playing field for all suppliers.”

Energy purchasing firm ENER-G is hoping the Government will grant the necessary powers to Ofgem and claims it is already playing its part in protecting businesses.

Mark Alston, General Manager of ENER-G Procurement said: “It is vital that such bad practice is driven out of our market. We now supply our customers with a Unique Broker Identification Number to combat sharp practice by a minority of rogue brokers. This helps verify that we are their legitimate representative and gives them confidence that we abide by a rigorous code of practice.”

Ofgem also plans to review energy suppliers’ use of automatic rollover contracts on the smallest businesses but ENER-G is calling on the regulator to investigate the impact across the whole market.