Callum Thompson, chief executive of Business Energy Claims, claimed that the “disreputable practices” of some energy brokers look set to continue for some time despite the energy watchdog’s investigation into their behaviour.
Ofgem has promised to crack down on brokers who take as much as 50% of a company’s energy bill in commission to set them up with a supplier.
The energy watchdog said it would “tackle unscrupulous energy brokers” to help millions of small businesses get better deals.
It said that while many of the two-thirds of microbusinesses which use a broker to get a deal benefit from the arrangement, a large number do not.
Some businesses are paying thousands of pounds more than they need to in broker commission charges, the watchdog said.
Mr Thompson highlighted the case of a Yorkshire-based rugby club, which has a claim for more than £100,000 after using a third party to enter them into several electricity and gas agreements since 2016.
According to Mr Thompson, the broker failed to disclose its fees to the club, which vary from around 10% of their spending to 50%.
A Yorkshire-based charitable leisure centre also has a claim for around £80,000 after using a third party to enter them into several electricity and gas agreements since 2018, Mr Thompson said.
Mr Thompson said: “The broker failed to disclose their fees which occupy up to one third of the charity’s costs. What these two cases, which are only the tip of the iceberg, demonstrate is that any business, in any sector can be a victim of energy mis-selling.
“Across the country we have worked with a significant number of organisations, including small businesses, charities, schools and sports clubs all of which have one thing in common – they have been mis-sold an energy contract and are entitled to financial recompense.
“While Ofgem has investigated energy brokers and suppliers and published its report and recommendations, which include revealing hidden commission, it will be a while yet before these are implemented. We believe that more than 90% of business energy contracts that have been sold by a broker have been mis-sold in at least one aspect although most involve several aspects of mis-selling.”
Ofgem cited the example of a golf club whose energy deal contained a “hidden” commission of 50% of its energy bill. The golf club was estimated to owe £24,000 in these hidden fees.
Despite promising to search the entire market for a good deal, the unnamed golf club’s broker only gave its customer one option at the end of the process.
Sheffield-based SSB Group has become the latest law firm to join Business Energy Claims. It will provide support to clients as claims are progressed against energy brokers and suppliers.
Jeremy Brooke, Group CEO at SSB Law said: “The mis-selling of energy contracts to businesses is a scandal, at a time when so many are feeling the financial pinch the pandemic, rising wages and inflation.”
Government and consumer groups have also raised concerns about poor practice by a minority of brokers.