Thursday 21 November 2013

Ofgem’s new powers to protect businesses from ‘rogue’ brokers

Energy regulator Ofgem can now take direct action against brokers that mis-sell energy to business customers.

It has gained new powers to clamp down on ‘rogue’ brokers and other organisations that market products or services to business customers in a misleading way.

The energy regulator can stop brokers from using misleading marketing tactics and apply to court for an injunction to ensure they are complying with the legislation.

The new powers come after Ofgem's latest research found around one third of small businesses in the UK didn't believe brokers were upfront about the costs of their services. Previous research has also shown firms are concerned about cold calling, high pressure sales tactics and “unprofessional behaviour” of some brokers.

Philip Cullum, Consumer Partner, Ofgem said: “It’s crucial for our economy that Britain’s small businesses get a fair deal in the energy market. Getting help from a broker can assist in keeping bills down but business consumers need to feel confident that they know – and get – what they’re paying their broker for.

“We’re pleased that Government recognised the value in Ofgem getting these powers, which should give better protection and confidence to businesses… The powers mean that Ofgem can investigate misleading marketing to businesses in the energy sector.”

It follows the case Ofgem put to the Department for Business Innovation and Skills for the regulator to have the powers to enforce the Business Protection from Misleading Marketing Regulations (BPMMR) earlier this year.

The regulator is also developing a code of practice for energy brokers which is scheduled to be published for consultation next month.