A group of over one million small businesses have asked the Office of Gas and Electricity Markets (Ofgem) through a letter to take action against dishonest energy brokers who overcharge companies, charities, care homes, and religious groups by adding billions of pounds in secret fees to their bills.
Eight small business organisations, such as UKHospitality, Care England, and the British Retail Consortium, wrote the letter to Ofgem. They warned that they would raise their concerns with the government directly if Ofgem failed to address this issue and allowed the exploitation to continue.
Ofgem is the body that regulates energy in Great Britain. With the aim of protecting consumers’ interests, Ofgem makes decisions on energy price controls and enforcement. For the past ten years, Ofgem has promised to take action against energy brokers who trap companies in bad deals.
Energy brokers are companies that act as middlemen connecting energy suppliers to consumers, and unlike energy suppliers, brokers are largely unregulated. Rogue energy brokers engage in various scams to increase their commissions, including hidden fees, deceptively selling energy contracts to businesses, inflating consumers’ gas and electricity usage, and sometimes impersonating energy companies. For instance, a broker could add almost £12,000 in commission on top of a £49,000 gas contract for a single-care home.
What Is Ofgem’s Plan?
Following complaints from businesses and organisations demanding that electricity suppliers reveal how much they pay the middlemen who promote their services, the UK’s energy regulator, Ofgem, announced that it will take action on hidden energy broker fees.
On 26th July 2023, Ofgem proposed new rules to make energy suppliers transparent about hidden broker commissions they add to business contracts and enable businesses to use a redress scheme to resolve disputes.
For the areas that it does not have the power to regulate, for instance, energy brokers, Ofgem said it plans to ask the government to consider further protection. Ofgem is also advocating for businesses to have the option to contact the energy ombudsman.
What to Do if Involved in an Ofgem Scam
Scammers may get involved with various energy scams. Sometimes they could reach out to you, pretending to be Ofgem. They might call you, visit your home, message you on social media, send you emails or texts, or even use pop-up messages on websites. If you think you have been a victim of an energy scam, here is what to do:
- Report the scam to Action Fraud, England, Wales, and Northern Ireland’s fraud and cybercrime reporting centre.
- Contact your bank immediately if you suspect you have been scammed or if you have divulged any of your personal information, such as your bank details.
- Inform Ofgem about the scam via email after you have reported a possible scam to Action Fraud or Police Scotland.
Generally, to protect yourself against Ofgem scams, it is important to:
- Avoid all contact from Ofgem that looks or sounds suspicious.
- Verify email addresses; legitimate Ofgem emails will always end with @ofgem.gov.uk.
- Look out for the Ofgem logo in all communications, ensuring it appears clear and undistorted.