Cash-strapped businesses looking to save energy will be offered better protection against unscrupulous energy suppliers and brokers under new proposals set out today by the energy regulator.
The reforms unveiled by
Ofgem and described as "far-reaching" will make it easier for businesses to switch
energy suppliers when looking for a better deal and will prevent
miselling by brokers. The proposals, which are part of wider reform of the energy market, are particularly aimed at helping
smaller businesses. They follow massive energy price hikes that have hit both households and the non-domestic market, and complaints from businesses about their energy suppliers and brokers.
"During our investigation into the energy market, businesses told us about a range of problems they were having with energy suppliers and also some energy brokers," Ofgem’s chief executive Alistair Buchanan said. "Ofgem is now proposing a series of reforms to ensure that business customers get a better deal from their energy supplier and greater protection for those using energy brokers. This will greatly increase the protection for businesses, especially for smaller firms. As we have demonstrated in the domestic market, we will also take a tough line on any suppliers we find systematically breaching
rules designed to protect businesses."
Ofgem proposals
Under its proposals, Ofgem said it would put new enforceable standards of conduct into suppliers’ licences to ensure "fair, honest and transparent" behaviour among suppliers and brokers with their business customers. Those companies that flouted them would face financial penalties, the energy regulator said.
Businesses that have less than 50 employees and an annual turnover of under £10 million will, it said, also get better protection through the extension of existing licence conditions, which currently only protect micro businesses.
To combat poor sales practices amongst energy brokers, Ofgem said it would introduce a Code of Practice accreditation scheme and seek new powers from Government to take enforcement action directly against brokers for misleading marketing.
As part of the measures, and following the findings of its investigation earlier this year, Ofgem said it was already "actively considering" taking action against suppliers who were not "playing it straight" with businesses looking to switch suppliers.
Today’s proposals for businesses follow a series of reforms to protect householders against the energy suppliers announced by Ofgem last month.
Ofgem said it would launch a consultation documentation laying out the reforms for the non-domestic market later this week. A factsheet about the proposals in more detail is available the Ofgem
website.
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