Concealed consultancy commission 'is raising energy bills'

13 August 2010

15 August 2010 | Angeline Albert

Energy buyers can pay up to 10 times more than necessary for electricity or gas as suppliers hide charges in their bills, broker Bergen Energi UK has claimed.

Energy brokers are often paid a commission by suppliers when advising clients on purchasing decisions. Bergen is calling for tighter regulation of the consultancy market after it audited the bills of prospective customers and found many purchasers were repeatedly paying hidden fees to pay for this commission.

In one case £650,000 of commission was found hidden in one buyer’s bill relating to the last three years.

Richard Southgate, vice-president at Bergen, said suppliers must be up-front and financially transparent when putting contracts in place. "There is relatively little regulation and it is clear from our findings businesses need better pricing information to base their procurement decisions on,” he said.

"The problems can arise no matter what product or contract is in place. Consultants frequently negotiate with energy suppliers to add on a hidden commission to unit rates before these are quoted to the customer. This means they end up paying much more per kWh than necessary.

“It is surprising the percentage of purchasers who are completely unaware of the astronomical concealed commission charges they are paying. In many cases they have been doing so for years, which can equate to millions of pounds in lost capital.”

Around 80 per cent of energy consultants receive their fees directly from vendors. Bergen advised purchasers to ask suppliers to confirm if any additional commissions have been built in to their pricing. Bergen also intends to raise the issue with gas and electricity regulator Ofgem.

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