Imagine you’re a runner, and you’ve been sold shoes that are two sizes too small. It’s hurting your performance, it’s causing unnecessary pain, and quite frankly, it wasn’t what you signed up for. This is how businesses feel when they fall victim to energy mis-selling. Often, smaller businesses lack the resources to recognise or combat this malpractice, leaving them with a discomforting bill to pay at the end of every month. However, making a complaint about energy mis-selling doesn’t need to be a Herculean task riddled with jargon and legal complexity. Stand up against unfair practices with our simple, comprehensive step-by-step guide on “How to Make a Complaint About Energy Mis-Selling.” It’s time to lace up your shoes properly and run your business as efficiently as possible. Let’s do this together.
To make a complaint about energy mis-selling, you should gather all relevant documentation, research your rights and the energy supplier’s obligations, and contact the energy supplier directly to request a resolution. If necessary, you can escalate the complaint to the Energy Ombudsman or seek legal advice. For detailed guidance on making a claim, please visit our website.
Understanding Energy Mis-selling
Energy mis-selling refers to the practice of selling energy deals under false pretences or engaging in misleading marketing tactics by energy suppliers. This practice often leads to small businesses signing unfair contracts with unfavourable terms, which can be difficult to exit. In some cases, businesses end up paying more than they should have for gas and electricity. Unfortunately, many small business owners are not aware that they have been victims of energy mis-selling until it is too late.
Mis-sold business energy contracts cost UK businesses hundreds of millions of pounds every year, leading to financial hardship, disrupted business activities, and even company liquidation. The challenges associated with energy mis-selling have been compounded by the high number of third-party intermediaries (TPIs) involved in the process.
To illustrate this point further, consider a case in which a TPI charges high commission fees to represent a specific energy supplier without the client’s knowledge or consent. Such conduct would mean that a TPI has put their financial interests first rather than representing the best interest of their client.
In most cases, TPIs earn commissions based on the number of deals they close on behalf of their clients. The temptation to close more deals and earn more commission may lead them into promoting unsuitable deals for their clients’ needs.
Thus, it is essential that small business owners understand typical instances of energy mis-selling that could affect them.
Typical Instances of Energy Mis-selling
Typically, energy companies will engage in various tactics aimed at selling products that are not appropriate for small business owners. Some examples include:
Aggressive Sales Tactics: In many cases, sales agents use tactics such as cold-calling, door-to-door visits, and unsolicited emails to convince businesses to switch their energy provider, using high-pressure sales approaches to force them into action without fully understanding what is on offer.
Lack of Transparency: Energy companies have been known to withhold information that could be crucial in decision-making by not providing adequate contract details, such as the length of the deal and its associated costs. This often results in businesses signing deals without understanding their full implications.
Bait and Switches: Some energy companies promise low-priced deals to encourage businesses to switch over, only to raise prices dramatically after a short period of time. This tactic has led many small business owners into accepting deals that appear too good to be true, which turn out to be just that.
Hidden Fees and Charges: Some energy providers use hidden fees and charges that are not disclosed upfront, leading to higher bills for unsuspecting small business owners. Such additional costs may include exit charges for leaving an unsuitable contract or fees for additional services.
In one instance, an energy company sold a contract under false pretences, falsely implying a 20% discount on costs compared to current tariffs when there was no such discount available. As a result, the small business owner ended up paying more than twice what they had previously paid for electricity.
The impacts of energy mis-selling can extend beyond financial loss. Small businesses may experience increased stress levels due to the added burden of dealing with unexpected bills. As a result, they may experience disruptions in operations and reduced productivity due to the need for constant attention on resolving issues related to mis-sold energy contracts.
While some argue that complaints related to energy mis-selling may not deliver expected outcomes, complaining is a necessary step towards advocacy and change. By making a complaint, small business owners can raise awareness about malpractices in the industry while also having their cases reviewed by regulatory authorities or other involved parties.
With these instances in mind, the next step is identifying the appropriate authority for complaints about energy mis-selling.
- Fifty percent of businesses have expressed dissatisfaction with the service provided by Third Party Intermediaries (TPIs) in negotiating energy supply contracts.
- A staggering £100 million was taken from UK businesses due to mis-sold energy contracts in the year 2022.
- Ofgem registered over 1000 cases of energy mis-selling reported within the UK in the span of a single year, 2022.
Initiating a Complaint about Energy Mis-selling
If you believe that your business has mis-sold an energy contract, it is crucial to know how to initiate a complaint about energy mis-selling in order to resolve the issue as efficiently and effectively as possible. It can be a daunting and frustrating process, but understanding the necessary steps makes it easier to prepare, submit, and follow-up on your complaint.
The first step in initiating a complaint about energy mis-selling is to gather all relevant documentation. This includes details of your existing energy contract, any correspondence with energy suppliers or third-party intermediaries (TPIs), and information concerning the circumstances surrounding the alleged mis-selling. Collecting evidence is important because it allows you to clearly state what has happened and how it has impacted your company.
Before officially submitting your complaint, it’s important to make sure that you have researched your rights and the supplier’s obligations. Familiarise yourself with laws governing both energy supply and sales conduct so that you are well-prepared when making your complaint. Try gathering information on recent legislation policies and legal precedents which could support your argument.
Let’s say that an energy supplier representative deliberately lied to secure a new contract for their company while misleading your business by intentionally hiding significant clerical errors from you. You may need evidence of several phone calls, emails documenting their practises – whether collected via secret recording or individual testimonies – that might help strengthen your claim.
Once you are ready, it is time to contact the relevant party through whom you bought the contract or initiated the transfer. If you used a TPI as an intermediary for this transaction, then they should be your first port of call for addressing your concerns. Discuss the problem thoroughly with them before taking more serious actions.
If no satisfactory resolution comes forth after attempting to work out the issue directly with the TPI or utility provider, escalate the issue with the Energy Ombudsman by submitting a formal complaint as per their guidelines. Carefully track all relevant correspondence and note down the dates of all phone calls and conversations for future reference so that you can hold anyone accountable in case of delays.
- Initiating a complaint about energy mis-selling can be a daunting process, but by gathering relevant documentation, researching your rights and the supplier’s obligations, and contacting the relevant party through whom you bought the contract or initiated the transfer, you can efficiently and effectively resolve the issue.
- If no satisfactory resolution is found, escalate the issue with the Energy Ombudsman by submitting a formal complaint as per their guidelines and carefully track all correspondence for future reference.
Identifying the Right Authority for Complaint
Identifying the right authority for complaint is important if you want to ensure that your issue gets resolved in a timely and efficient manner. Depending on the nature of your complaint, there are various regulating bodies which oversee Energy companies, help customers resolve complaints, or enforce laws governing energy supplies’ conduct.
If you used a TPI to find an energy supplier, they are most likely a member of an Alternative Dispute Resolution (ADR) scheme. These schemes are independent third-party entities hired to assist in resolving disputes between businesses and suppliers, and thus offer a platform to escalate unresolved complaints.
Depending on the ADR’s ruling and judgement, they may also provide compensation if their investigations reveal any wrongdoings from contracted companies..
If your supplier has not resolved your issue satisfactorily through their own company complaints process, you can approach Ofgem with your issue, a government body responsible for overseeing and enforcing rules regarding energy industry conduct in line with regulatory frameworks in the United Kingdom.
It should be noted that Ofgem deals downstream – below transmission level – therefore complaints about electricity & gas generator companies or energy traders should be dealt with by the Financial Conduct Authority instead.
The Financial Conduct Authority (FCA) regulates financial conduct while promoting competition & transparency within financial markets among others, including energy mis-selling practices where consumers’ rights have been violated beyond what is allowed by law. As such, submitting a complaint about illegal practises by an energy broker/post-sale services firm may also fall within FCA’s remit
Some people claim that seeking legal advice immediately is better than going to agencies like Ofgem or the FCA due to longer resolution waiting times, with more chance of recouping losses taken due to energy mis-selling if successful. However, legal expenses are usually high and run without any guarantee of success.
According to Ofgem, some 80% of complaints regarding energy mis-selling resolved through these bodies may result in reimbursement or prompt corrective measures from their respective supplying companies. Given the broader reach and jurisdiction of government agencies like this as well as the less expensive nature for filing grievances than going straight to court, it’s a prudent first step before seeking further legal/arbitration remedies.
In order to guarantee that your complaint has been received by your chosen authority, ensure you receive an acknowledgment of receipt from them with a reference number and an indication when they will reply back. Keep all relevant documents for your personal records and prepare yourself for following up on the issue at subsequent stages after submission.
Preparing Your Complaint: Key Points
Mis-selling of business energy can be a frustrating situation, and it can be challenging to put together a complaint that will effectively communicate your grievances to the relevant authorities. However, in order to increase your chances of successfully resolving the issue, there are a few key points you should keep in mind when preparing your complaint.
First, gather all the information you have regarding the mis-selling incident. This includes any contracts, correspondence, and invoices related to the transaction. Additionally, if you have kept any notes or communications with the seller or broker, make sure to include those as well.
It is essential that you clearly outline the mis-selling tactics used by the supplier or third-party intermediary (TPI), as well as how these tactics misled you. Be concise yet thorough in describing what was said and how it differed from the actual situation.
Another key point to keep in mind is that your complaint should articulate how the mis-selling has harmed your business. Whether it’s financial losses or operational disruption, be specific about how this has affected your company.
Finally, keep a record of all communications regarding your complaint. This includes emails, phone calls, and physical letters exchanged between yourself and the supplier or TPI.
For instance, let’s say that you were approached by a TPI who offered you significant savings on your energy bills. After signing up for their service, however, you soon realise that your bills are actually higher than before due to hidden fees and charges that were not disclosed initially. In preparing your complaint, focus on highlighting these hidden charges and provide specific examples of how they have financially impacted your business.
It’s important to remember that businesses have legal rights against unscrupulous suppliers and brokers who engage in illegal activities such as mis-selling. By providing clear evidence of what transpired and how it has negatively affected your company, you are increasing your chances of successfully resolving the issue.
It’s worth noting that some suppliers may try to deny that mis-selling occurred or argue that the charges were disclosed. In such cases, it’s important to remain persistent and use any available evidence to support your argument. Additionally, consider seeking legal advice if you feel that your complaint is not being properly addressed.
With these key points in mind, we can now move on to discussing the steps involved in submitting a complaint about energy mis-selling.
Steps to Submit Your Complaint
Submitting a complaint about energy mis-selling involves a few critical steps. While the process may vary depending on the company you are dealing with, these general guidelines should help you get started.
The first step is to identify the appropriate authority for submitting your complaint. This can be done by checking the supplier’s website or contacting their customer service department directly. Alternatively, if the supplier is a member of an industry association such as Energy UK, you can submit your complaint through their official complaints process.
Once you have identified the appropriate authority, write a clear and concise letter detailing your complaint. Make sure to include all relevant information we discussed earlier in this article such as contracts, invoices, correspondence and notes on communications with brokers and TPIs.
When writing your complaint letter, keep in mind that it should state exactly what happened during the transaction and what damage has been suffered by your business as a result.
After drafting your letter, send it to the appropriate authority via email or post. For best results, send certified mail or use recorded delivery so you can prove that your complaint was received.
Following up with the supplier after submitting your complaint is also necessary. You should expect communication from them within eight weeks of submission outlining next steps they will take regarding addressing your concerns.
If no resolution is reached or no action taken by the supplier on the submitted complaint you can escalate the complaint to the Energy Ombudsman. The Energy Ombudsman is an independent body responsible for resolving disputes between energy suppliers and their customers in a fair and impartial manner.
For instance, let’s say that you have identified the appropriate authority as Company X’s customer service department. After composing your complaint letter which outlines how Company X or an associated intermediary has misrepresented themselves to your organisation’s detriment, send it to the customer service email with certified delivery.
Instead of relying on oral communication at this stage, keep a written record of all communications exchanged regarding your complaint. These written records are proof that efforts were made so that when there is no resolution, it can serve as evidence when the matter goes to court or other legal proceedings.
It is important to remain patient throughout this process since it can take time to investigate the matter, come up with possible solutions, and negotiate an acceptable outcome. In some cases, adding pressure will make the situation worse so avoid making threats against the supplier or TPI in your communications.
Think of submitting a complaint as starting a marathon instead of sprinting toward a resolution. It’s better to go slow and smart than fast and inefficiently – by following these steps, you’ll be taking control of your situation and increasing your chances of reaching a satisfactory result.
With these steps in mind, we can now move on to exploring financial conduct and market laws concerning energy mis-selling.
Exploring Financial Conduct and Markets Laws on Energy Mis-selling
One of the best ways to protect yourself against energy mis-selling is to understand the laws governing such transactions. Businesses can find relief with the Financial Conduct Authority (FCA), which regulates financial actions in the United Kingdom. The FCA outlines regulations that TPIs, brokers, and suppliers must follow when selling energy contracts. By acquainting yourself with these regulations, you can spot breaches of conduct and decide if you should make a complaint.
According to the FCA, businesses should receive documentation that includes an explanation of their energy charges and their contract terms before signing any agreement. All fees in relation to their contract should be apparent before acceptance, including exit fees in case they want to terminate the contract early. While it may be tempting for brokers to sell lengthy fixed-term contracts, each business should know and weigh-up whether such deals will genuinely benefit them or not.
It is mandatory that every individual selling an energy contract has valid training that encompasses knowledge about consumer rights and market conditions regarding energy supply. Most importantly, TPIs should show impartiality by offering various options from different suppliers without being swayed by potential sales commissions from any party.
If, at any stage during your relationship with a supplier, you are unhappy with the services provided or feel misled by what was guaranteed in your initial contract, you have the right to make a complaint. The regulatory authority oversees vital structures for handling & investigating both mis-selling complaints by industry individuals seeking compensation & doing so by applying its regulation like Treating Customers Fairly (TCF) guidance.
For instance:
A broker who promised low energy rates could technically hold true to that promise but manipulate other terms of the contract resulting in additional hidden charges later on. Therefore, if you had agreed after being informed about specific rates but later discovered inconsistencies or hidden charges related to these clauses – without your consent – then this would be a case of unfair treatment, which is a breach of regulation.
To establish your case properly, it’s vital to have substantial documentation of your correspondence with the supplier and appropriate brokers. You’ll need all the various contract copies—initial & revised—sales emails, confirmation emails, and even conversations had over the phone. This will give a clear view of all promises made and whether or not they were kept.
Depending on circumstances, mis-selling cases could escalate to legal action whereby you can recover any losses that occurred due to mis-sold contracts. Still, we encourage you to exhaust all dispute resolution mechanisms before seeking legal action as this is the most peaceful yet effective way to resolve differences.
In the next section we take a look at what actions should be implemented after lodging a complaint and other available sources of support for affected businesses.
Post-complaint Actions and Support
After making a complaint to the right authority – which could either be the Ombudsman Services or Citizens Advice Consumer Helpline in some cases – there are various steps that you should follow. One significant step is keeping records of all correspondences till completion. This way, if further action is required, it’s simpler to get up to speed with everything that happened since your last correspondence.
The initial resolution process may take some time to resolve any complaints thoroughly; patience is thus highly recommended in such scenarios. Complaints made via the proper channels are almost always investigated thoroughly and followed up upon by relevant authorities – so trust in their ability to rectify situations appropriately.
In cases where businesses feel threatened by suppliers who may try to cut them off before resolving disputes fully, contacting the National Grid can come in handy. When contacted about resolution matters with energy providers affiliated with them, it’s possible that National Grid staff might intervene if there are significant risks or threats of a supply interruption to remain within legislative bounds.
Let’s say you feel suffocated by the energy supplier and need a quick exit strategy to sustain business operations. In that case, you could take advantage of “Deemed Contracts” as stipulated within Ofgem rules. Deemed contracts come into play when a property undergoes an energy metre change, and no switch process is engaged. At this point, the current supplier would continue to bill for their services at non-negotiable or contracted rates until the next reading or contract acceptance occurs.
Remember that filing complaints doesn’t come with any penalties—even if allegations made were proved wrong in the long run—because it’s critical for businesses to protect themselves from unscrupulous behaviour by all parties involved.
Despite the many available options for affected businesses to access straightforward remedies and decent resolutions against mis-selling perpetrators, recovery mechanisms can vary depending on each case scenario. Additionally, factors like organisational memory, personnel turnover, and time & resources spent during legal disputes may impede progress in achieving desirable outcomes.
Think about recovering from an injury; after the immediate action has been taken and injuries treated accordingly, your quest towards total recovery requires patience & sustained effort. It might be frustrating sometimes depending on how deep-rooted the injury was and what measures are taken to correct it fully. The same applies here– post-complaint actions are a healing journey for your business – so being patient is one step towards ultimate recovery.
Understanding the laws concerning energy mis-selling is essential because it helps you make sound decisions when dealing with brokers or energy suppliers. We encourage affected businesses not to leave any stone unturned in seeking redressal where necessary—the UK regulatory framework before offering compensation considers all circumstances leading to the complaint – but going through such processes could be overwhelming for affected entities. For this reason, we urge affected customers to get help & support from relevant entities as they embark on their recovery journey.
Seeking Legal Advice
If your complaint about energy mis-selling is not resolved satisfactorily, you may need to consider seeking legal advice. In such cases, it is advisable to consult a legal professional with experience in energy contract law. They will be able to guide you on how to proceed legally and what options you can avail of.
Seeking legal advice can be an expensive process, but it may be necessary if you are seeking a legal remedy or have suffered significant financial losses. If you are making a claim for compensation, your lawyer will be able to assess the amount of damages that you may be eligible for based on your circumstances.
For instance, if your business has suffered losses due to unfair or deceptive practices by an energy supplier or broker, you may be entitled to recover those losses through a legal claim. Your lawyer can help you determine the value of the losses and represent you in court, arbitrations or other dispute resolution proceedings.
Your lawyer will also advise you on the strength of your case and whether it’s worth pursuing. Depending on the circumstances, they may suggest alternative means of resolving the matter outside the court system or provide guidance on how to negotiate a settlement with the energy supplier or broker.
It’s important to understand that not all complaints about energy mis-selling will have legal merit. Some complaints may not result in any financial compensation or remedy at all. This is why it’s crucial to seek legal advice from a qualified professional who can review the facts of your case and advise you accordingly.
Additionally, it’s worth noting that initiating legal action can be a time-consuming and stressful process. You will need to gather evidence and prepare documents meticulously, attend hearings and trials, and potentially face counterclaims and cross-examinations. It’s important to assess whether the emotional strain and distraction from running your business outweighs potential financial benefits before deciding on legal action.
Coping Mechanisms for Affected Businesses
Being a victim of energy mis-selling can be a stressful and overwhelming experience for businesses. Not only does it result in financial losses, but it can also negatively impact the morale and productivity of employees. As a business owner, it’s important to take steps to mitigate the damage caused by such incidents.
Firstly, you need to ensure that your energy contracts are reviewed by qualified professionals or independent experts to identify any irregularities or discrepancies. Having an accurate record of your contracts and usage will help you identify potential breaches early on and prevent further losses.
Secondly, it’s worth exploring alternative energy suppliers and brokers who have better reputations and track records. By conducting thorough research into different providers, you can make more informed decisions about whom to do business with.
For instance, some brokers may offer free services or appear to have good reviews online but may misrepresent contract terms, billing amounts or deliberately fail to disclose critical information that could affect your business’ finances.
Thirdly, investing in employee education and training on energy contracts, terms and conditions, and regulatory frameworks is a worthwhile investment. When staff members are knowledgeable about the workings of the energy market and aware of common red flags or warning signs of mis-selling practices, they are less likely to be taken advantage of.
Finally, consider joining an industry association or seeking support from other businesses who may have similar experiences. It can be incredibly helpful to network with peers who can empathise with your situation and provide valuable advice on how to cope.
However, it’s worth noting that some coping mechanisms may not entirely solve the problem at hand. They may only provide temporary relief rather than addressing the root cause of the issue. In such cases, seeking legal advice or filing a complaint with relevant authorities may be necessary steps towards finding effective solutions.
