As a business owner, you have enough concerns to keep you occupied.
Small-to-medium enterprises, particularly in their fledgling days, present their owners and managers with a wealth of problems. And one of any firm’s biggest ongoing matters is its overheads.
Right now, energy bills – and the rising price of utilities – are a hot topic, both for personal and corporate customers. It’s a huge outgoing that can be a major headache for business owners struggling to keep afloat.
The rising costs are concerns for all of us, and business owners need to make every saving they can in the current climate. It doesn’t matter if you’re in the hardest-hit sectors, such as hospitality and recreation, or your speciality faces what we’ll call a less uncertain future than most. You need to keep your outgoings to a minimum wherever possible.
Aside from anything else, the last thing your business needs is a hidden charge on top of your bills. That’s what hundreds of thousands of companies have discovered they’re doing, however. Brokers’ commission on top of suppliers’ base costs adds up and can make a world of difference to SMEs battling to continue trading in the face of the challenges posed by COVID.
Are you forking out good money on undisclosed charges?
At Barings Law, we have a team of experts dedicated to recovering money for customers who have been mis-sold their business energy plans.
Call us on 0161 200 9960 to see how we can help your business make a claim for compensation to redress the balance.
Paying for their premises’ energy is a massive outgoing, and all the indications are that several energy suppliers – around a dozen Ofgem-registered firms – are at risk of folding. Energy providers are unable to pass the rising cost of gas and electricity to their consumers, due to the regulator’s price cap.
The cap was recently increased and currently limits the annual cost to a customer using an average amount of energy at a little less than £1,300. The price cap for domestic customers on a standard tariff is to be reviewed again in April.
But what about the contracts that small businesses initially sign up to? Did they get the best deal available?
If they used a business energy broker they would be forgiven for thinking they’d been shown, and no doubt agreed to, the cheapest agreement that was on the market. However, this may not necessarily be the case.
The market for consumers’ energy supply is stringently regulated; the business energy sector less so.
So, think back to when you enlisted the help of any third-party intermediary for your firm’s energy supply. An estimated two-thirds of businesses enlisted the help of brokers. It’s not difficult to see why, as they can offer a range of energy-related services, such as finding the best quotes available, managing the sign-up, co-ordinating a supplier switch for their client and prompting clients when their contract is nearing its end, so they avoid costly rollover rates.
Sounds like a win-win situation, doesn’t it? And energy companies are happy to work with third-party intermediaries to help them reach more buyers. They have done for decades, after all.
And there are many, many brokers who do what their customers require of them, reviewing all the options on their behalf, outlining the choice available and operating with complete transparency when it comes to their fees.
But this, sadly, is not always the case.
And thousands of cases of mis-sold deals have been emerging.
Energy companies use brokers to secure them customers, and the brokers are often incentivised with commission. This commission can – and in most cases, does – take the form of charges added on top of their customers’ business energy bills.
This practice has left more than nine in 10 small-to-medium firms overpaying for their business energy. In a multi-billion-pound sector that’s an awful lot of money SMEs have forked out unnecessarily in hidden and undisclosed fees. That can spell disaster for struggling businesses who have enough to contend with, having spent nigh-on two years battling the impact of the COVID pandemic.
High gas and electricity prices for business can also have a potentially-catastrophic knock-on effect. The much-publicised rise in energy bills means many SMEs may decide to reduce production, or cease it altogether, or try to pass the increase in costs onto their customers.
Both are viable solutions but come with risk, and could backfire horribly.
Things are changing now, however. And businesses are set to benefit from the intervention of the energy sector’s regulator.
Ofgem are cracking down on brokers who overcharge for their services by way of inflated commission. This action will reduce what businesses are paying for their utilities, a very handy boost in these trying times. And payments to redress the balance are being made. Hundreds of millions have already been repaid to businesses for the injustice they have been served by hidden charges, and there is plenty more work still to be done.
If you have yet to stake your claim for money back that you’re entitled to and that can make a huge difference to your business, then speak to one of our advisors.
They can talk you through the process, let you know what you need to do at the outset, and then we can take care of everything for you, including assessing the scale and value of your overpayment, whether you have a case of mis-sold business energy and contacting your suppliers directly on your behalf.
If you have ever used an energy broker, you may be overpaying for your utilities. It’s time you took action and claimed your money back.
Call us today on 0161 200 9960 or click the webchat icon at the bottom-right section of this page to speak to one of our operators.