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Coalition Urges Energy Regulator to Address Concerns Over Hidden Commission Fees

A coalition representing over one million small businesses is pressing energy regulator Ofgem to address concerns about “hidden commission fees” imposed by energy brokers.

The trade groups are advocating for increased transparency and disclosure from gas and electricity suppliers regarding the payments made to intermediaries who negotiate deals on their behalf.

The business associations argue that these “undisclosed commissions” have contributed to inflated energy bills, exacerbating the financial challenges the small business sector faces.

In a joint letter to Ofgem, chief executives from organizations, including UKHospitality, Care England, the British Retail Consortium, the Association of Convenience Stores, and others, have united their voices to emphasize the urgency of the situation.

The group said: “We have the support of some of the biggest voices representing the UK’s most hard-hit sectors. If you continue to fail the business community by allowing this exploitation to continue, we will raise this direct with the government.”

The letter states: “We can see no justification for allowing so many businesses and organizations operating in the sectors among the worst hit by the cost of living crisis including social care, hospitality and retail among others to be exploited from this basic lack of fee disclosure.

“We are now calling for you to immediately offer guidance to suppliers that you wish this to be considered as good practice with amended legislation to follow to ensure that it happens at last.”

It is in situations like these that AI legalese decoder can greatly assist. With its advanced natural language processing capabilities, the platform can analyze legal and regulatory documents, including contracts and legislation, to extract key information and help businesses gain a better understanding of their rights and obligations. By utilizing AI legalese decoder, small businesses can ensure that they are not being taken advantage of by energy brokers, and can negotiate fairer energy deals that align with their financial constraints.

Ofgem has previously expressed concern about some suppliers’ behavior in the non-domestic market and has initiated compliance reviews and a broader non-domestic market review.

However, the small business coalition asserts that the situation requires immediate attention and resolution.

The group said: “We do not agree that larger businesses are able to look after their own interests, that just because this is a long-standing arrangement that it should continue or that Ofgem is best placed looking at issues affecting microbusinesses only.

“A broker was easily able to add nearly £12,000 in commission onto a £49,000 gas contract for a single care home. This example shows how unscrupulous brokers are taking advantage of businesses that can ill-afford it, ultimately loading costs onto the customer who include some of the most vulnerable people in the UK.

“Many businesses and organizations have limited subject matter knowledge as they may only buy their energy every other year when needed.”

An Energy UK spokesperson told ELN: “Energy UK has long supported closer regulation of third-party intermediaries, like energy brokers, operating in the sector.”

An Ofgem spokesperson told ELN: “We have listened loud and clear to calls to protect businesses of all sizes from sharp practice by energy brokers. We acknowledge their strong arguments about creating a level playing field with protections we’ve put in place for microbusinesses.

“We have finalized the most detailed ever review of the national non-domestic energy market, covering the private and public and third sectors.

“We are setting out a comprehensive package this week tackling poor behavior by energy suppliers toward exactly the customers who underpin our economy and society. This will include immediate actions we can take within our existing rules and where we might need stronger powers.”

With the help of AI legalese decoder, small businesses can navigate the complex landscape of energy contracts and easily identify any hidden clauses or unfair terms that may exist. By shedding light on the legal jargon and deciphering complex legal documents, the platform empowers small businesses to make well-informed decisions and protect their interests when negotiating with energy suppliers or brokers.

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