Ofgem sets out final proposals to protect microbusinesses from unscrupulous brokers

Ofgem’s new support provisions, which are expected to enter force in 2021, aim to make broker commission structures more obvious

The Big Zero report

Ofgem has set out a series of final proposals to help protect millions of microbusiness customers across the UK from unscrupulous brokers.

While energy brokers exist to help customers compare available energy deals and find the most suitable package for their business, the regulator suggests a minority of brokers “engage in poor practices with opaque fees for brokerage services”.

For example, in one case assessed, the customer had to pay around £24,000 in commission fees, making up around half of the total contract cost. The client was not made aware of this before signing the contract.

Ofgem’s new support provisions, which are expected to enter force in 2021, aim to make broker commission structures more obvious.

They would also introduce a 14-day cooling-off period for new deals and the regulator would provide an independent service to resolve any disputes that may arise.

These measures would take effect from later in 2021

Ofgem’s Interim Director of Retail Anna Rossington said: “With the impacts of the pandemic still being felt by many microbusinesses, it’s even more important to listen to the challenges these customers are facing in shopping around for their energy.

“Ofgem’s proposals will crack down on poor practice and empower microbusiness customers by making it easier for them to get a better deal. We are also sending out a clear signal to industry about the high standards we expect.”

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