Energy litigation expert warns hidden commissions just the tip of the iceberg

Mis-sold commercial energy claims are on the rise nationwide, but leading litigation experts are warning there could be thousands of small businesses who still have no idea they have been targeted.

Earlier this year, North Tyneside-based Business Energy Claims (BEC) hit the headlines after helping recover more than £14,000 for a small amusement arcade business after energy provider Engie was found liable for failing to disclose the commission a broker was making from the contract.

The groundbreaking ruling against Engie opened the floodgates for further claims from businesses which have found themselves in a similar position – but this appears to be just the tip of the iceberg.

The mis-selling of energy contracts scandal appears to be far more than just a problem with unscrupulous brokers. Instead, it’s a multi-faceted issue, according to Callum Thompson, the managing director at BEC and Energy Solicitors Ltd (ESL).

ESL is a dedicated law firm which works in partnership with sister organisation Business Energy Claims (BEC) to support businesses affected by mis-sold energy contracts.

As the only company with specialist business energy consultancy knowledge, ESL’s  experienced team has an unrivalled level of expertise and specialises specifically in energy-related disputes.

Mr Thompson is concerned that many people still won’t know they could have a claim, and he and his colleagues are on a mission to ensure businesses that have experienced any kind of unscrupulous behaviour from intermediaries or commercial energy suppliers get the opportunity to redress the situation.

“The business energy landscape can be quite complex, or certainly it is often made that way for the customer so they struggle to understand exactly what they are paying for,” Mr Thompson said. “This can lead to things such as mis-selling and overcharging for instance.

“This whole thing is a huge minefield and every day we are hearing from people who’ve been heavily impacted and more often than not don’t realise it’s happened.

“Business owners may not have the time or knowledge to fully understand the energy industry and many could face issues that might impact their business, whether that be undisclosed commission, being pursued by brokers for lost commission, energy overcharging and the threat of data breaches.”

So what pitfalls should small businesses owners be looking for?

Last month, the Department of Energy Security and Net Zero (DESNZ) announced how businesses will soon have access to free support to resolve issues with energy contracts as part of government and Ofgem changes to tackle hidden fees, issues and mis-sold services.

Mr Thompson, however, points out this is by no means a panacea. “While I think everyone welcomed this move, there is still a massive group of businesses who won’t fit the bill to benefit from this,” he said.

“There are a number of people who won’t be able to use this service (based on historic cases) which means there’s a gap there which isn’t being addressed – that’s where we can step in.”

Another big issue centres around protection of sensitive data. Following a rise in the number of energy suppliers and brokers going bust in recent years, there has been an increase in data breaches.

“When this happened, we saw a lot of people being automatically switched to different suppliers which has, in some circumstances, led to some data breaches, ” said Thompson.

“We’re certainly seeing more calls for us to step in to help defend these data breach claims at the moment and it’s something that is potentially very frightening for people.

“Nobody wants to imagine their data has fallen into the wrong hands and it can lead to all kinds of problems so it’s something we find a lot of people are, quite rightfully, very concerned about.”

The BEC team has also noted a lot more enquiries about revenue recovery over the last 12 months.

This is a process of energy firms pursuing businesses for alleged lost revenue, representing the sum of commission they say that they would have earned for contracts that were due to go live, but subsequently didn’t.

It’s something which has risen in prominence particularly over the last 12 months, as Mr Thompson explained: “Sometimes energy contracts won’t go as initially planned or often someone doesn’t take up a contract which a broker has recommended and that can result in a broker calling in a debt resolution service to recover the money they think they’re owed.

“There are many other reasons why these kinds of disputes can arise but they can have a detrimental impact on the person or business involved. A key area of concern for us is that we have a growing number of businesses being pursued by brokers for lost commissions.”

Additionally, high pressure sales tactics continue to come under fire, as many businesses continue to fall victim.

“Customers feeling like they’ve pushed into an agreement is a recurring theme. Typically, smaller businesses will have someone looking after their energy but often, due to the pressure on them to secure the best deal, they can be pushed down a certain route when they don’t have all the correct information to hand.

“We see so many examples of people being pressured into a contract that may not be the best one for them.

“There are many other areas where we have been able to help clients, things like threats of disconnection and other areas including mis-selling or misrepresentation.

“There are many pitfalls and issues that can affect small businesses, so it’s vital to know your rights and what you could be entitled to if you have, or believe you may have, been mis-sold or misrepresented in your energy contract.

“We have helped hundreds of businesses across the country win compensation. We offer a no win no fee structure because we understand the challenging environment many smaller and medium businesses find themselves in. Energy and other bills are high enough for businesses already struggling, without the added challenge of being overcharged or mis-sold.

“It’s really simple to access our support on https://businessenergyclaims.co.uk/ or  https://energysolicitors.co.uk/ .

Together with its panel of leading law firms, it is seeking to enable businesses to understand the nature of the deals they have done and recover monies where they have been overcharged.