Golf club charged £24,000 in ‘hidden’ energy fees

Alistair Dunsmuir
By Alistair Dunsmuir August 2, 2020 07:35

Energy regulator Ofgem has cited a golf club that was charged £24,000 in ‘hidden’ commission to a broker, and has used the example to propose a change to how the energy industry operates.

The UK golf club has not been named.

According to the Evening Express, the club used a broker to set itself up with a new energy supplier. However, the deal contained a ‘hidden’ commission of half of the energy bill.

Ofgem has said it will crack down on brokers that take such a huge proportion of commission and would “tackle unscrupulous energy brokers”.

The watchdog added that while many of the businesses that use a broker to get a deal benefit from the arrangement, a large number do not.

“In too many cases, microbusinesses are hampered by a lack of transparency when using brokerage services and end up being locked into poor-value deals because they are not fully aware of what they are signing up to,” Ofgem said as it unveiled new plans to help regulate the sector.

It cited the example of the golf club and said the broker promised to search the entire market for a good deal, but only actually gave the customer one option at the end of the process.

It added that a social club owed 41 percent of its energy bill to a broker in commission that had not been disclosed to the club either at the point of sale, or on bills or the contract.

“Providing greater transparency and tackling unscrupulous brokers will help microbusinesses get a better, fairer energy deal,” said Philippa Pickford, Ofgem’s director of future retail markets, consumers and markets.

“This is more important than ever as microbusinesses emerge from the challenges posed by the Covid-19 pandemic.

“These proposals are part of Ofgem’s wider work to improve the energy retail market through smart metering, extra support for vulnerable customers, plus faster and more reliable switching.”

The new suggestions, which will go to consultation, include plans to introduce a dispute resolution service to mediate between brokers and unhappy customers.

It will also introduce a two-week cooling-off period for businesses which have signed up to a new supplier, in line with the time that households have to reconsider.

Bills and contracts will also have to include information on how much commission is going to the brokers.

 

Alistair Dunsmuir
By Alistair Dunsmuir August 2, 2020 07:35
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