Love Energy Savings urges Ofgem to crackdown on unregulated broker market
Award-winning North West business Love Energy Savings is calling for Ofgem to crackdown on ‘unscrupulous elements’ within the unregulated energy broker market to prevent British businesses losing out on millions of pounds.
The Bolton-based company has produced a White Paper, entitled ‘Greater Transparency In The UK TPI Sector’, to put pressure on the Government to take action to protect businesses, especially SMEs.
This report highlights how some energy Third Party Intermediaries (TPIs) capitalise on an unregulated market to generate huge profits, sometimes at the expense of their business customers. Similarly, it examines what Small and Medium Enterprises (SMEs) should look out for and expect from reputable TPIs, who are able to offer significant benefits to businesses in terms of the savings they are able to secure, alongside the energy expertise they are able to offer.
“With supply margins expected to be amongst the tightest on record during 2017, this issue is becoming increasingly critical to businesses as they attempt to juggle rising costs, security of supply and the need to reduce their carbon footprint,” the report said.
“With Ofgem, the non-ministerial Government regulator for gas and electricity markets in the UK, last year announcing that they were halting work on implementing an official Code of Practice, at least for now, we aim to provide the best guidance possible for businesses to ensure that they are properly protected from the risk of falling foul of a dishonest TPI.”
Responding to the White Paper, the Government’s Department for Business, Energy & Industrial Strategy, said: “It is vital that we do all we can to help businesses to engage in the energy market to ensure their energy bills are as low as possible. High energy bills can hit hard and make the cost of running a business more expensive.”
It added: “During the two-year investigation into the energy markets, the Competition and Markets Authority (CMA) found micro business customers had limited awareness of, and interest in, their ability to switch energy supplier.”
Research shows the ‘Big Six’ energy suppliers charge an average of 10% margin on gas for SMEs, compared with 4.4% for domestic customers.
The report highlights what businesses should look out for:
- A good TPI will have favourable relationships with all the major suppliers, plus numerous independent suppliers, and will negotiate with them on a business’s behalf to secure them the cheapest deal available
- They should be open about the process, transparent with their prices and compliant with the TPI Code of Practice
- They should always request a Letter of Authority (LoA), which will allow a TPI to liaise with your current supplier and other energy providers on your behalf, working to find you the best prices on the market. However, the letter should also explicitly state that the TPI cannot authorise and contract without confirmation from an authorised member of your company
- Businesses should actively seek out reviews online, look out for trust signals, such as awards, and be savvy when it comes to selecting which TPI to work with
- Finally, a TPI should be completely open about any additional costs or pass-through-charges, which may affect the overall price of your final energy bill
The report has been compiled to guide businesses on what to look for in a trustworthy TPI and the benefits that can come with using one.
It outlines examples of malpractice, so businesses know what to avoid; as well as giving a sample Letter of Authority so you can go to a TPI prepared and know your rights; and it explains the TPI Code of Practice, the voluntary set of guidelines that any reputable TPI will be actively following.
To read the full report, you can download it here:
Love Energy Savings – winner of the Fast Growth Business of the Year title at the recent Business Masters Awards – was established in 2007. Since then, the company has switched over 121, 000 business customers’ energy tariffs, saving customers over £70.5 million on their electricity and gas bills.
