Millions of businesses and community groups are collectively pursuing a £2 billion legal claim against energy companies, asserting that the companies paid secret commissions to energy brokers and subsequently transferred the costs to consumers.
A legal firm representing hundreds of small businesses has sent letters to British Gas, E.ON, SSE, and Opus, accusing them of inflating customer bills by billions of pounds through payments to brokers without the customers’ awareness. According to industry lawyers, numerous small and medium-sized businesses nationwide, as well as community groups, schools, and care homes, were allegedly pressured by brokers who received substantial commissions for enrolling them with the energy firms. In certain instances, businesses experienced a surge of over 50 percent in their energy bills due to these undisclosed payments.
This practice has become commonplace over the past two decades. Business owners have reported feeling persistently pursued by brokers during the renewal of their energy deals, creating pressure to commit to more expensive arrangements. Landlords have also witnessed their electricity bill spike from approximately £900-£1,200 per month to £3,000-£4,000 per month after signing a new energy deal with a broker upon the expiration of their previous arrangements.
Roland Birks, proprietor of the Ship Centurion Pub in Whitstable was taken aback to discover that the unit price had surged from the previous 15p per kWh to the new rate of 63p per kWh. “They incessantly pursue you,” he remarked. They call repeatedly to inquire about the expiration of your energy contract, often making up to 20 calls. It is not uncommon to receive five, six, or even eight calls in a single day. “One broker quotes you one price, and the next provides a different one. The bombardment is confusing.” Despite the current relief provided by the government’s energy bills discount scheme, he is apprehensive that his energy costs will more than double come April, posing a significant threat to his business.
“An additional £3,000 or £4,000 per month would be unsustainable. I’d have to consider laying off staff, shutting down the kitchen, and taking on more responsibilities myself,” he stated. “I’ve already had to let go of one staff member, and I’m struggling to hold on. I’ve resorted to turning off freezers, cooling the cellar for fewer hours each day, and removing fridges.” Estimates show that, if the commission structure for Mr. Birks’ energy bills remains undisclosed, he could be eligible to claim back up to £16,500.
Industry law firms, having already enlisted claimants nationwide, approximate that the average claim currently stands at around £25,000 per customer. They suggest that long-term contracts for heavy energy users might even qualify for claims exceeding £1 million.
