Transparency about level of commissions, a commission cap and an end to cold calls, are some steps that could be taken to bring the spiralling energy broker market under control, a new report by Octopus Energy for Business reveals.
The report – Small businesses in the dark: Energy brokers and the hidden scandal in energy prices – paints a disturbing picture of the prevalence of this behaviour, at a time when everything should be done to bring down energy bills.
This comes as new data shows 3.2 million small businesses had a negative experience with a broker in the last year*.
The damaging practices range from concealing commissions, locking businesses into unsuitable energy contracts, cold calling with aggressive sales tactics, posing as energy suppliers, and more.
The lack of transparency in the market has meant that eight in ten (78%) of small businesses are demanding that brokers’ commission is clearly stated at the point of sale and seven in ten (70%) want a cap on broker commissions.
Octopus – which has 60,000 business customers – is calling for immediate action to protect small businesses’ interests. While the Government and Ofgem are looking into energy suppliers’ work with brokers, brokers themselves aren’t regulated directly.
It proposes three ways to make business energy more transparent:
- No more hidden broker commissions and introducing a cap on commissions
- An end to unsolicited contact from brokers
- For energy brokers themselves to be properly regulated
Zoisa North-Bond, CEO of Octopus Energy for Business, said: “The pandemic, inflation and the cost of living crisis have increased pressures on small businesses to colossal levels. It’s simply not right that some energy brokers have been capitalising on this. The business energy market has become the wild west, and bad broker behaviour is running rampant.
“It’s fundamental we raise awareness of these damaging practices – and there are things that can be done now to drastically improve transparency in the market. We need to stand up for small businesses to help drive down bills – and we need to get moving today.”