After years of complaints about mis-selling, hidden commissions and poor transparency in the business energy market, ministers are now preparing for a new framework that would finally bring oversight to an industry long operating in the shadows.
The move follows a public consultation that found overwhelming support for direct regulation of TPIs.
Self policing has failed
Stakeholders from across the sector – including consumer bodies, suppliers and the brokers themselves – acknowledged the existing voluntary approach isn’t working.
While codes of conduct and supplier licence conditions have helped in parts, the DESNZ report says they’ve failed to prevent widespread issues, particularly in the small business market where vulnerable firms have been left out of pocket by rogue brokers.
At the heart of the problem is a system that rewards commission over clarity. Many TPIs have signed customers onto inflated deals in return for higher payments from suppliers, with the end user unaware of the full costs involved.
A lack of redress and confusion over responsibility has left many businesses stuck with overpriced contracts and nowhere to turn.
The government is now weighing up a new model of regulation. While there’s debate over whether a general authorisation regime or a bespoke licensing system would work best, the direction of travel is clear: the market needs cleaning up.
What’s on the cards?
Key principles on the table include mandatory transparency over commission, stronger dispute resolution mechanisms and clearer conduct rules.
The scope is still up for discussion, but the focus is on brokers operating in the non-domestic market – particularly those paid via commission from suppliers.
The aim is to root out bad practice without stifling innovation or the good TPIs who do serve customers well.
One thing’s certain – the sector can’t carry on as it has.
With TPIs playing a growing role in smart tech, energy efficiency and net zero services, trust and accountability are more important than ever.
Expect a full response from government later this year. For now, the message is clear: regulation is coming and the industry needs to get ready.
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