Setting the Record Straight
Dear valued members of the ECA community,
We recently became aware of an article published on Monday April 17th, claiming that energy suppliers in the UK, including British Gas and SSE, are facing a £500 million legal claim over alleged “secret fees” paid to brokers.
We wanted to address this issue and clarify any misconceptions. The response to the article that we sent to the author at The Times, is as follows:
Dear Sir / Madam,
The above-referenced article contained a number of materially incorrect statements. Incidentally, you covered the same story a few weeks ago so I’m assuming this is simply paid content.
First, you state the average claim to be £60,000 – this is ludicrous. Energy brokers charge fees usually by a commission which gets added to customers’ bills. This is by a unit rate uplift. The typical average uplift over the past few years has been around 1p.
A commission would be calculated as uplift (1p) X Average annual consumption of energy X contract length.
The typical UK business uses less than 60,000 KWH of energy and would usually enter a 2 or 3-year deal. At 1p per KWH, this creates circa £1,800 in commission.
Second, you state that Ofgem has “highlighted “the practice of energy companies paying secret commissions to third-party energy brokers. Because the commissions were hidden in energy contracts, they were said to be a breach of the fiduciary duty to the customer.”
This is again untrue. Ofgem has never made such a statement nor commented on the fiduciary duty – if one exists.
This is a complex legal matter yet to be tested in court and sensationalist reporting to help the claims companies isn’t helping the end customers.
Finally, these companies are using loopholes in the Claims Management Regulations and acting without regulation – often running spurious arguments and wasting huge amounts of time.
The trade body you asked to comment on is a trade body for energy generators – Not brokers. I’d suggest you contact the ECA which represents the broker’s views.
The ECA takes the inaccurate and misleading claims in The Times article very seriously.
As a trade body that represents and protects the interests of energy consultants and intermediaries, we are committed to standing shoulder-to-shoulder with our members and advocating fair practices in the industry.
It is important to note that the legal claim mentioned in the article is still under investigation and remains unresolved. Furthermore, we want to emphasise that OFGEM, the UK’s energy regulator, has not issued any statements regarding the alleged breach of fiduciary duty by energy suppliers.
At the ECA, we believe in transparency and ethical conduct in the energy consultancy industry. Therefore, we urge our members and community to seek accurate information and sources to make informed decisions when assessing any claims or allegations.
We want to make it unequivocally clear to our community that we will not shrink in the face of unfounded accusations or misleading statements; rather, we take a bold and assertive position against inaccurate or unfair reporting in all forms.
We believe in providing timely and transparent insights on all relevant news, whether positive or negative, empowering our community and enhancing the industry’s reputation, further highlighting our unwavering commitment to promoting best practices that benefit our members and their customers.
As a responsible trade body, we uphold the values of transparency and ethical conduct in the energy brokering industry and will continue to uphold these values and ensure that our industry is held to the highest standards of professionalism and integrity.
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Without the Energy Consultants Association – we are all simply passengers with our fate in the hands of Ofgem and the Government.
UPDATE: The Response From The Times
We are pleased to share an update on our recent response to The Times article.
The publication has provided a response to our concerns and has agreed to amend some of the language in their online article. We are grateful for their timely response and willingness to take our feedback into account.
Specifically, they have acknowledged that the language used in the article regarding the alleged breach of fiduciary duty by energy suppliers could be confusing and have agreed to clarify it.
Dear ECA Team
Thanks for getting in touch.
Regarding your first point, the article said: “RGL estimates that seven in ten British businesses could be eligible to claim and says that more than 4,000 companies have expressed a wish to join the action. According to its analysis [my emphasis], £60,000 could be claimed per company, on average.” The article was clearly reporting RGL’s assessment, rather than making an assertion of fact.
Regarding your second point, we said that Ofgem had highlighted this practice, which it had. The following sentence does not refer to Ofgem and there was no intention to attribute the position on fiduciary duty to them. That said, we see your point that the paragraph could be confusing. We will amend that line in the online article to read “Because the commissions were hidden in energy contracts, they were said by RGL [my emphasis] to be a breach of the fiduciary duty to the customer.”
Regarding your last point, RGL has assured us it is an FCA-regulated entity: but we will take your wider point on board. I’ve made our reporter aware of your letter and we will bear what you say in mind when planning future coverage.
As a trade body that represents and protects the interests of energy consultants and intermediaries, we take our responsibility to ensure accurate and fair reporting in the industry seriously. We are proud to continue our one voice approach in standing up against misleading and inaccurate reporting about our industry.
We will continue to advocate for transparency and ethical conduct in the energy consultants industry, and we encourage our members and the wider community to seek accurate information and sources to make informed decisions.