DID YOU KNOW THAT THE ENERGY BROKERAGE MARKET IS NOT REGULATED?
If you answered ‘Yes’ then it’s likely that you were mistreated by a rogue energy broker and found that there was nobody for you to turn to for help. Ofgem offers a little protection, however as the market is largely unregulated they are limited in the assistance which they can provide. There has long been talk of Ofgem producing a mandatory Third-Party Intermediary (TPI) code which all brokers would have to adhere to, however as of yet this has not come to fruition.
A small number of brokers, in a bid to improve the image of the industry and to prove themselves to be trustworthy, have implemented their own internal TPI code of conduct which falls in line with Ofgem recommendations. maximeyes is one such broker, and we are audited at least twice a year by a number of the largest energy suppliers to ensure that we follow our internal code in every aspect of our business.
TOO GOOD TO BE TRUE?
Talk to any business owner, as we do on a daily basis, and they will tell you that they receive numerous calls from unscrupulous energy brokers offering unbeatable pricing which seems too good to be true. Unfortunately, the bulk of these simply are too good to be true!
Citizens Advice said that 42% of complaints they received from small businesses about mis-selling had mentioned brokers. In fact, Ofgem themselves have this year found that 50% of business who have used brokers cited “very or quite negative” perceptions of brokers, compared to 46% in 2015 and 44% in 2014.
THE COST OF ERROR.
At maximeyes we hear the horror stories on a regular basis. So far this year 4 different businesses have come to us asking to get them out of an unfavourable arrangement that their broker had put them into.
One broker took a £15k refund from a supplier into their own business account, not informing their client that the refund was applied!
Another broker entered their client into a 5-year electricity contract with uncompetitive rates without their client’s consent or knowledge. We are now working with that client and their supplier to try and renegotiate the contract on better terms.
For another client, we have identified a number of their meters which had undergone a change of tenancy were left on out of contract rates 130% higher than the current market rate by their current broker, incurring an additional cost of £2,500 per month.
By far the most popular feedback we hear from clients who come to maximeyes from another broker – “They never get back to us on time and leave all the queries in a mess!”
The problem is real, and too many businesses suffer as a result of dealing with their cowboy brokers.
With the deregulation of the water market in England there have been fresh concerns from OfWat, who regulate the water industry, that disreputable energy brokers are fervently dialling businesses up and down the country. In an interview with Utility Week Grand Union Water Company co-founder Peter Sceats called for stronger regulations “I call them ‘Flash Harry’ business tactics and they are at play in the energy market every single day,” He feared that with the lack of energy market regulations the Water market will fall prey to the same tactics, stating that “(energy markets), should be and should have been” regulated by Ofgem.
MAXIMEYES HAS BEEN ONE OF THE MOST TRUSTED ENERGY BROKER FOR ALMOST 13 YEARS. WITH A 97% CLIENT RETENTION RATIO, WE FEEL CONFIDENT TO PASS ON ADVICE TO BUSINESSES LOOKING TO OUTSOURCE THEIR ENERGY MANAGEMENT.
1. DO YOUR DUE DILIGENCE
Conduct a simple credit check, looking through the company’s accounts and their trading history to make sure you are appointing a well established energy broker.
Checking their website, social media profiles and any other information available on-line (YouTube channels, Glassdoor profile,) will allow you to understand the company better, how they conduct themselves, who they are interacting with, the quality of the information they are publishing and how their current and former employees interact with them.
2. CHECK THE LETTER OF AUTHORITY (LOA)
All brokers should need an LOA to check your consumption and contractual information before they are able to quote any prices. If they provide you with any details without the LOA, they are accessing it illegally and should not be trusted. Please be weary of the actual wording of the LOA as well:
- It should not give anybody exclusivity (you should be able to test the market freely)
- It should not lock you into any contracts or obligate you to anything without your prior consent
- It should be refreshed on a regular basis to ensure your commitment has not changed
3. CHECK THEIR SUPPLIER LIST
There are dozens of energy suppliers in the UK. Any respectable broker will have all ‘big 6’ plus a good range of smaller and niche suppliers. This will give you confidence that you will see a good quality tender and price analysis suitable to your business needs.
4. RANGE OF SERVICES
Only a few consultancies offer a wide range of services, covering all utilities and beyond. It is a great time and money-saver for your business to be able to deal with a smaller number of companies to cater for all your needs in this area. Not everybody provides a 360-degree view on utilities like maximeyes does (gas, electricity, water, telecommunications, waste, connections and energy efficiency), but there are some consultancies who will comprehensively cover at least procurement services for all the utilities.
5. POST CONTRACT SUPPORT
Check the consultant’s track record in terms of their post-contract support offered to clients. There is nothing worse than having to deal with all the supplier queries on your own when you outsourced the contract negotiation to the broker in the first place. The supplier queries can be a mine-field and for somebody who does not have experience in navigating the industry, it can be extremely costly exercise which will offset any savings made during the contract negotiation. You want somebody who will take the load off you and leave you to run your business, whilst they look after your utilities in a professional manner.
An obvious but key point – if you suspect that your consultant isn’t being completely honest or you feel that you can’t rely on them to keep their promises, question them. Ask for escalation, ask for written confirmation of actions taken by them if you are in doubt. If you are being given a hard time, look for external support. Many clients come to maximeyes to help them deal with their previous brokers – such is nature of this industry.
Maximeyes was founded on the principle of revolutionising the customer experience. Having recognised the challenges and shortcomings of the energy industry we are committed to combatting rogue traders and offering a reliable, honest, 360-degree approach to utility management. We have a 97% client retention rate, one of the highest account manager to client ratios and the majority of our business actually comes from client recommendations. This is how you know you can trust us.
If you have had bad experiences in the past, are thinking about employing an energy broker for your business or are simply looking for advice or guidance please contact our team now who will be happy to discuss your business needs.