Consumer Guidance

Business Consumer Rights and Protections

All business consumers, regardless of size, are entitled to fair treatment by energy suppliers. Suppliers must adhere to Standards of Conduct under their supply licence agreement. If a broker is involved, fees must be disclosed. These standards apply to billing, contracts, and transfers but do not regulate charges or fees, except for deemed contracts. Micro and small businesses benefit from additional protections.

Micro and Small Business Consumer Protections

Consumer Redress

  • Micro and small businesses can escalate unresolved complaints against their energy suppliers to the Energy Ombudsman after 8 weeks or upon receiving a ‘deadlock’ letter.
  • Complaints against brokers can be referred to a Qualifying Alternative Dispute Resolution (ADR) Provider. The broker should provide details of this service.

Business Classification:

  • Microbusiness: Fewer than 10 employees (or full-time equivalents) and an annual turnover/balance sheet total under €2 million, or annual energy usage under 293,000 kWh (gas) or 100,000 kWh (electricity).
  • Small Business: Meets at least one of the following criteria: fewer than 50 employees (or full-time equivalent) AND an annual turnover under £6.5 million or a balance sheet total under £5 million.

Additional Protections for Microbusinesses:

  1. Back-Billing Limits: Suppliers cannot charge for energy consumed over 12 months ago if it was incorrectly billed.
  2. Principal Terms Disclosure: Suppliers must clearly disclose key contract information, including broker fees.
  3. Contract Provision: Full contract terms must be provided within 10 days of signing.
  4. Broker Requirements: Suppliers must only work with brokers that participate in a qualifying ADR scheme.
  5. Broker Fee Transparency: Broker fees must be disclosed upon request.
  6. Switching Notice: Suppliers cannot require notice for switching, except for Evergreen Contracts.
  7. Contract Rollover Limits: Automatic rollovers are limited to a maximum of 12 months.
  8. Renewal Notification: Suppliers must provide key renewal terms at least 60 days before contract expiry.
  9. Additional Support: Microbusinesses can seek assistance from Citizen’s Advice and the Extra Help Unit.

Using Third-Party Intermediaries (TPIs) in the Energy Market

TPIs can provide valuable support in navigating the energy market. However, unlike energy suppliers, TPIs are not licensed, leading to potential concerns over transparency and costs. Ofgem requires energy suppliers to ensure that TPIs working with micro and small businesses are signed up to a Broker ADR scheme.

Since 2006, the UIA has operated a Code of Practice and Redress Scheme for business consumers of all sizes. UIA-registered TPIs must act in their clients’ best interests and adhere to high standards, similar to those imposed on regulated energy suppliers.

Key Considerations When Using a TPI

  1. Accreditation and Compliance:
    • Confirm that the TPI is UIA-accredited and adheres to its Code of Practice.
    • Ensure the TPI is part of a Broker ADR scheme if you are a micro or small business.
  2. No Cooling-Off Period:
    • Business energy agreements do not include a cooling-off period. Ensure you fully understand the contract before committing.
  3. Verbal Contracts:
    • Verbal contracts are legally binding. Only agree when you have all necessary details.
    • Consider recording calls for reference.
  4. Transparency and Costs:
    • Ask how the TPI is paid and what services they provide.
    • Be cautious of ‘free’ services—costs may be included in energy rates.
    • Confirm all charges before signing.
    • Request contract terms, including termination fees, price changes, notice periods, and contract duration.
  5. TPI Contract Clauses:
    • Avoid TPIs with contract clauses allowing them to recover ‘lost’ commissions if contracts do not go live or end early.
  6. Monthly Meter Readings:
    • If you rely on manual meter readings, take regular readings to support complaints if issues arise.
  7. New Business Premises:
    • New locations operate on expensive deemed contract rates.
    • Take time to research suppliers instead of rushing into long-term contracts.
  8. Opt-Out from Sales Calls:
    • Register with the Corporate Telephone Preference Service (CTPS) to reduce unsolicited calls.
    • Report unauthorized calls to the Information Commissioner’s Office (ICO).
  9. UIA Membership:
    • Check whether the TPI is part of a Code of Practice and Independent Redress Scheme, specifically the UIA.

By following these guidelines, business consumers can make informed decisions and better protect their interests when engaging with TPIs in the energy market.