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Ofgem’s new powers to protect businesses from misleading marketing

By 21st November 2013No Comments

The UK’s energy regulator, Ofgem, announced yesterday that it has been granted the authority to take direct action against ‘rogue’ brokers that missell energy to businesses.

The Business Protection from Misleading Marketing Regulations (BPMMR) gives Ofgem the power to clamp down on brokers and other organisations that are marketing energy products or services to business customers in a misleading way.

The latest Ofgem research finds that approximately one third of small businesses in the UK have a negative view of energy brokers. Those surveyed, who had been approached by brokers, felt that the broker had not been upfront about the cost of their services, displayed high pressure sales tactics and behaved in an unprofessional manner.

Philip Cullum, Consumer Partner, Ofgem, said: “It’s crucial for our economy that Britain’s small businesses get a fair deal in the energy market. Getting help from a broker can assist in keeping bills down, but business consumers need to feel confident that they know – and get – what they’re paying their broker for. Brokers could now face investigation by Ofgem if they fail to treat their business customers fairly.

“We’re pleased that Government recognised the value in Ofgem getting these powers, which should give better protection and confidence to businesses. This important addition to Ofgem’s regulatory toolkit complements the major changes we are making to the energy retail market for business and domestic consumers alike. The powers mean that Ofgem can investigate misleading marketing to businesses in the energy sector.”

Commenting on the announcement  Chris Allison, Managing Director of Auditel (UK) Limited said: “The independent research carried out by Ofgem supports our view that many businesses have a negative view of energy brokers.  We have anecdotal evidence that supports the claim that some brokers are not upfront about the true cost of their services and we welcome these new regulations that are intended to ensure that businesses get a fair deal in the energy market.  We also strongly support the need for an enforceable code of practice for third party intermediaries and are currently working with Ofgem to examine this.”

He adds: “Unlike some brokers Auditel adopts a holistic approach to energy managements providing organisations with a complete solution to their energy needs, from procurement of services and management of consumption through to strategic planning and the implementation of complex energy management programmes, including facilitating access to Government subsidies such as Feed-In tariffs and the Renewable Heating Incentive.