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24 February 2014 | Gurjit Degun
Energy suppliers and brokers could be subjected to a new code of practice by Ofgem to protect businesses from misselling.
The code suggests requires suppliers marketing deals through a broker, or third party intermediary (TPI), to use one that complies with the code.
The energy and gas watchdog said TPIs play an important role in helping firms compare and choose tariffs but “some do not operate fairly and mislead businesses”.
The code requires TPIs to be completely transparent about the fees for their services, the suppliers they are affiliated with, and the contracts they offer.
It also asks members to refrain from using “pressurised sales techniques”, and to have a complaints handling procedure in place at all times.
Maxine Frerk, partner for retail markets at Ofgem, said: “We are determined to clamp down on poor practices by some TPIs and provide more transparency in this market. They also have to improve their overall training and the way they deal with customers.
“By requiring suppliers to only work with accredited TPIs, we will ensure that suppliers and TPIs are jointly accountable for giving a high quality service to business consumers.”
Ofgem is also proposing that small businesses should only need to give a maximum of 30 days’ notice if they want to switch suppliers at the end of their contract. Notice periods currently range from 30 to 90 days.
“At the end of the contract suppliers will also have to provide businesses with information on how much energy they have used in the last year and provide a comparison between their current rate and new rates they are offering,” said Ofgem.
“Suppliers will also have to acknowledge in writing any request that a business makes to switch at the end of their contract.”
Ofgem, currently consulting on the code until 9 May, said the regulations should be in place by the end of the year.
Those interested can respond to the consultation here.