Legal action threatens energy suppliers over ‘hidden’ broker fees

JMW Solicitors will take legal action against suppliers for alleged high-cost deals and undisclosed commissions

Law firm JMW Solicitors has announced its intention to take legal action against major energy suppliers.

The lawsuit is on behalf of hundreds of businesses affected by long term energy deals, which had allegedly hidden fees charged by brokers.

According to JMW, these brokers also got paid by the energy companies without customers knowing or agreeing to it.

In October 2022, the regulator Ofgem made it a rule for brokers to tell “micro-businesses” (small firms with less than £1.8 million in turnover) about their fees.

Nightlife entrepreneur Sacha Lord asked JMW to look into the problem.

Graham Small, a partner at JMW, thinks the situation between suppliers and brokers could lead to lots of claims, like the PPI scandal.

Small said: “Brokers received a commission from energy suppliers for recommending long-term fixed-priced deals to business, but those brokers did not inform their clients of the commission properly or at all.

“Often commissions were hidden in energy bills by being included in the customer’s tariff. In the more serious cases, these commissions are viewed as a bribe entitling customers to compensation.

“There are cases where the brokers’ commission makes up a significant portion of total energy costs of a business, adding significant sums to that business’ annual bill. Taking into account the millions of firms across the country that used a broker, it is possible that total claims could run into many millions if not billions.”

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