It’s a tough time to be an SME business owner, high interest rates combined with a cost-of-living crisis have led to a drop in consumer spending. Combine this with sky-high energy costs, and UK businesses face the perfect storm heading into winter.
But there could be relief on the cards for many British SMEs mis-sold business energy contracts. It's estimated that over 3,000 energy brokers operate in the UK, many of whom have been implicated in unethical practices. So, if you bought your energy through a third-party broker rather than directly from a supplier, you could be due compensation.
Micro businesses, defined as entities with fewer than 10 employees and a turnover less than €2 million, are particularly vulnerable. In 2020, Ofgem's investigation highlighted that these businesses were frequently victims of such deceptive practices.
Average claim values
The value of claims varies significantly across industries. For instance, hospitality companies may see an average claim value of £80,000, whereas engineering firms could experience claims up to £240,000. In general, businesses might recover up to 20% of their previous energy bills.
What constitutes a mis-sold contract?
The root of mis-sold business energy contracts lies in a lack of transparency. Energy brokers, tasked with negotiating contracts on behalf of businesses, sometimes fail to disclose critical information, leading to contracts that are not in the best interest of the client. Key indicators of a mis-sold contract include:
- Lack of full disclosure regarding commission or fees earned by the broker
- Contracts that were not fully compared across the market despite claims
- Long-term contracts agreed upon without clear communication of their tenure
Energy mis-selling most often occurs when brokers fail to disclose the commission or fees involved in arranging energy contracts. These costs are frequently hidden in the unit price as "service fees" or "introducers' fees", making them difficult for businesses to identify.
How to see if you qualify for a claim
The process of proving you’ve been mis-sold to can be complex but navigable with the right knowledge and guidance. The first step to see if you could recover significant financial losses is to answer just 4 simple questions.
In under 30 seconds, you’ll be able to see if you meet the claims criteria and potentially join hundreds of UK businesses exiting expensive contracts and claiming compensation for their troubles. If you qualify, we’ll connect you with a specialist legal team who work on a no win, no fee basis to gather evidence and assess your initial claim free of charge.
How to get the best deal
Even if you haven’t been mis-sold energy, it’s important for SMEs to remain vigilant. Businesses should always thoroughly vet potential energy brokers. Key questions include the broker's revenue model, commission structure, supplier payments, and their process for comparing and recommending tariffs.
When you purchase through links on our site or submit information, we may earn an affiliate commission. It's important to understand that if your claim is successful, legal fees will be deducted from compensation. You are not under any obligation to pay legal fees if you're unsuccessful.
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