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Landmark Change to Remove Hidden Commission Charges to Businesses for Gas and Electricity

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Business News Wales spoke with Neil Stockdale, Partner and Head of Financial Mis-selling at Hugh James, about a landmark change in the energy market which means that businesses are now able to request details of commissions paid or payable to brokers, via their energy supply contracts, directly from their energy supplier.

Many businesses instruct brokers to procure their gas and electricity supply but, what many brokers fail to tell their business clients, is that they are being paid a commission which is linked to that business’s consumption, and which is paid by that business through their energy bills.

This change, instigated by OFGEM as part of its 2022 decision and package of reforms, will help eradicate the hidden commission practices of countless brokers within the market.

Top 100 UK law firm, Hugh James, acts on behalf of many businesses who seek to recover undisclosed commissions paid to brokers. Claims range considerably in value, but it’s not uncommon to see commission charges making up over 25% of a business’s spending on energy without their knowledge.

Specialist energy claims lawyers at Hugh James have acted for businesses in a number of different sectors – including football clubs, agriculture, manufacturing, distilleries, and publishing. They are dealing with claims ranging from £10,000 to £1m.

The team are now encouraging micro-businesses to make use of the new reforms, which was applied from 1st October 2022, to request details of commissions they’ve paid, and seek redress where appropriate.

Commenting further on this landmark change, Neil Stockdale, Partner and Head of Financial Mis-selling at Hugh James, said:

“This change couldn’t happen at a more critical time for small businesses. The cost-of-living crisis and spiralling energy costs are putting so many companies at risk. That’s why it’s important for business owners to investigate whether they’ve fallen victim to unscrupulous brokers. Many of them have no idea they’ve been illegally charged commission. It’s only right that these brokers are forced to repay those who placed their trust in them.”

Small business owners, who think they may have been wrongly charged commission for their gas and energy supply, can contact the Hugh James energy claims team for advice.