Energy brokers come in various forms and have many different names – energy consultancy, TPI (Third Party Intermediary), or price comparison website. Ofgem defines them as “organisations or individuals that give energy related advice, aimed at helping you to buy energy and/or manage your energy needs. TPIs include switching sites, energy brokers and any company that offers support with energy procurement”.
Energy brokers often claim that their services are free or that they receive a commission from the supplier. This is not true, and they usually hide an ‘uplift’ within the cost of energy that you pay. As an example, if they put a hidden commission of 1p/kWh in 100,000kWh or units that would be £1,000 per year you are paying.
An energy broker will push a longer-term contract because that will give a greater hidden commission. If you use 100,000kWh or units of energy per year, then over 5 years that would be 500,000kWh or units and you would be paying £5,000 in total. This is often a breach of fiduciary duty as the energy broker is not acting in your best interests.
If an energy broker only provided a few quotations from suppliers, it may be because they did not act in your best interest. Often, an energy broker will only provide quotations from the energy suppliers who pay them the most. By prioritising their own interests, they are likely to have breached fiduciary duty.
The length of time it takes depends on the underlying facts of the case and the size of the claim against the energy broker. If the claim is small enough to be dealt with the in small claims court, it should take no more than 6 months. If the claim is larger and is dealt with as fast track, it should take 9 months. If it is multi-track, then the process will take significantly longer. We will work with you throughout the process – from inception, through to judgement.
The initial consultation with our claims specialists is offered at no cost and will help you understand whether you have a claim, and the potential size of the compensation on offer. Should we determine that there are grounds for a claim, you will be provided with our agreement and the process towards a successful claim.
If you are successful with a claim, then you will be able to get back what is often a significant amount of money. This may be through a financial award, through being released from an onerous contract, having your rate lowered with commission removed, or through a settlement with the energy broker. Our team will be able to provide you with an estimate of the size of your claim based on the underlying facts.
We work on a conditional fee arrangement – often referred to as ‘no-win, no-fee’ agreements. Should you claim be successful, we will deduct our fees from the compensation awarded or settlement received. Our fees will be detailed clearly in advance at the beginning of your claim.
Every case is different, and the outcome will depend upon the underlying facts. If the case goes to court, then you may need to attend with your appointed solicitor. However, if the case is settled out of court then there is no need for you to attend court.
As Ofgem has yet to introduce a TPI Code of Practice or proper regulation, there is no guarantee that the information you receive from your energy broker will be correct. We have seen instances of deliberately misleading or false information being provided by energy brokers when asked by clients.
Depending upon the supplier, it may be possible to receive this information. However, in our experience details of any hidden commission if often considered commercially sensitive information and you may be referred to the energy broker. If this is the case, then there is no guarantee that the information you receive from your energy broker will be correct.
If the energy broker completed a full market review and disclosed commission, then it is unlikely that you were mis-sold. If they didn’t do this, then the saving was likely used to tempt you into accepting an offer with hidden commission at a supplier with favourable commercial terms.
In most cases, a claim can be brought against your energy broker from up to 6 years from when the contract was put in place. However, depending on the underlying facts you may be able to make a claim within 3 years of discovering the action of the broker.