News

“UK businesses face 10% energy bill hike from secret commissions”

Litigation law firm has claimed that energy suppliers added an average of 10% to business gas and electricity bills by including undisclosed third party broker commissions.

A litigation law firm claims that businesses across the UK have incurred an additional 10% charge, on average, for their gas and electricity.

This increase is attributed to the routine inclusion of third party broker commissions by energy suppliers, as disclosed by the law firm during its ongoing examination of the matter.

The law firm, Harcus Parker, is currently engaged in group legal action to recover undisclosed broker fees, estimating the total at up to £2 billion.

The revelation suggests that millions of non-domestic energy customers experienced an inflation in their bills over a period spanning more than a decade.

The law firm’s research indicates that energy companies, on average, appended a cost of 1.7p per unit of gas and electricity to cover broker commissions, with some brokers permitted to add up to 6p per kWh.

Matthew Patching, Partner at Harcus Parker, said: “We have examined thousands of bills for customers joining our claim and it’s been quite shocking, in percentage terms, how much these secret commissions have added to their bills.

“When you hear they’ve added 1.7p per unit in third party broker costs it doesn’t sound much but if you’re only paying 10p per unit in total for your energy that’s a hefty percentage.

“It means many businesses are owed thousands of pounds. Some institutions and businesses with high energy costs are owed tens of thousands of pounds.

‘We’ve been calling on Ofgem to make these broker costs transparent for all-non-domestic energy customers for nearly a year and we’re delighted that they have finally listened. That said, others were raising this issue of secret commissions ten years ago so I’m not sure why it has taken so long.

‘It seems some unscrupulous brokers were more interested in getting themselves the highest amount of commission possible rather than getting the customer the best financial deal.”

An Ofgem spokesperson told Energy Live News: “After listening to concerns from businesses, Ofgem consulted on changes to supply licence conditions to require full transparency on how much is paid to energy brokers for securing a contract with the customer.

“Brokers can be invaluable in finding the best deal for their business. But we have proposed bringing in transparency on how much that service costs so the customer can make a full and informed decision as to who they do business with.

“Ofgem has asked government to introduce regulation of energy brokers, who fall outside our remit. While this is considered, we are working to ensure that customers are properly informed and protected with appropriate regulation on energy suppliers.”

Chris Shaw, Chair of The Energy Consultants Association, told Energy Live News: “I note the suggestion that energy bills were “inflated” by 10% which suits the narrative being peddled by these claims framers.

“Energy brokers have been the driving force to materially increase switching rates and lower out of contract rates over the past ten years – both offering significant savings to UK business. These benefits appear to be conveniently forgotten.”

“We have seen instances of claimants ending up with huge legal bills and courts repeatedly throwing these types of claims out (Leicester Indoor Bowls a recent example) – so I’d urge caution for anyone being sold a riches at the end of the rainbow story.”

Image: STUDIOMAX / Shutterstock