16 | Bed & Breakfast News | Summer 2019
The truth about
business energy
brokers
by Business Energy Claims Ltd.
A guide for B&B owners to avoid being
mis-sold energy contracts, and what to do
if you think you may have been mis-sold a
contract
As most Bed & Breakfast owners will attest
to, there are no shortage of commercial
energy brokers trying to sell their services,
with multiple phone calls per day from
brokers promising to reduce rates and help
businesses address their energy needs,
several business owners reported receiving
more than 20 call a day from brokers. Some
will claim the service is free, others that
“the supplier pays the commission”, but
most deliberately trying to give the client
the impression that the clients rates will not
be affected by the commission charges. The
truth, however, is quite the opposite.
If you ‘ve contracted gas or electricity via
a broker, disclosure of broker fees is rare,
and the reality is that the broker sets the
unit rate for their client, having access to
suppliers’ base prices and simply “uplifting”
the unit rate to a level they feel they can
get away with when presenting rates to
their client. Most businesses even feel they
received a good rate from their broker, that
is until it is looked into properly, or before
you look into the detail of the contract.
Most will have pushed long term contracts
to their clients, explaining that long term
contracts will protect the business, but
once you understand that there is a financial
motive which drastically doubles, trebles
(or even more) the commission earned
depending on the term selected, it’s hard to
dispute that it is done for financial reward
rather than in their clients best interests.
The simple truth of the way that energy
brokers operate is that unless you are
paying a bill for the services of the broker,
then you may well be paying more for your
energy as a result. Typically, a broker will
present a price to the customer and this
price will include a commission built into the
unit rate.
There is no official register of energy
brokers, but about 3,000 operate in Britain
(according to Cornwall Insights, an energy
market consultancy) and that figure is
growing due to lack of regulation, with
low barriers of entry into the market.
Many work on a commission basis and use
aggressive sales techniques to convince
businesses to switch.
And the suppliers are as much to blame for
this as the brokers, with some suppliers
offering unlimited commissions resulting
in some businesses unwittingly paying half
of their bills in commissions as a result, and
suppliers refusing to disclose commissions
either directly to affected businesses,
or make it clear on the bills how much is
payable to the brokers.
Mary Scott runs Sheepfold B&B in Shipton-
under-Wychwood, and recently was
approached by an energy broker claiming
that they could save her money and that
the service was free. She had just returned
from a holiday and was jet lagged when
a broker began to harass her with calls.
Trusting the brokers claims of being the
expert and thinking that she was protected