Ofgem, the energy regulator, has set out final proposals to help millions of micro business customers get a better energy deal.
Energy brokers help busy micro businesses to compare the market and find a better deal on their energy. But Ofgem found a minority of brokers engage in poor practices with opaque fees for brokerage services. In one case, 50% of the total contract cost (around £24,000) comprised broker commission fees that the consumer was not made aware of pre-contract.
Support package
Ofgem’s package of support would mean that information on broker commissions is clearer for customers and would introduce a 14-day cooling-off period for new deals.
Microbusiness customers would also get access to an independent dispute resolution service, if things go wrong.
knowing consumer rights
Ofgem is urging micro businesses to shop around for the best deal
Ofgem will work with Citizens Advice, so microbusinesses know their consumer rights and how the business energy market works.
These measures would take effect later in 2021 following the consultation. In the meantime, Ofgem is urging micro businesses to shop around for the best deal.
Addressing challenges
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."
Anna Rossington adds, "Ofgem’s proposals will crack down on the 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 the industry about the high standards we expect.”
