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Ofgem seeks to protect small stores from energy mis-selling

Ofgem is proposing a new code of practice to protect businesses from mis-selling by some energy brokers.


Ofgem seeks to protect small stores from energy mis-selling

Ofgem is proposing a new code of practice to protect businesses from mis-selling by some energy brokers.

The regulatory authority’s proposals will also require suppliers to only work with brokers or Third Party Intermediaries (TPIs) that have signed up to the code of practice.

TPIs include switching websites, energy brokers and energy efficiency advice providers who interact with energy consumers. Ofgem said the new code will clamp down on poor practices by some TPIs and provide more transparency for consumers on their fees, the contracts they offer and which suppliers they represent.

The proposed code will be governed by an independent board comprising suppliers, TPIs and consumer groups with oversight from Ofgem. This independent industry body will have powers to expel a TPI if it fails to comply with the code.

Ofgem has also opened consultations on the draft code of practice for TPIs and the use automatic rollovers of fixed term contracts for businesses.

Under Ofgem’s proposals, small businesses will only need to give a maximum of 30 days’ notice if they want to switch suppliers at the end of their contract. Currently notice periods range from 30-90 days.

Ofgem said that streamlining this across suppliers will end confusion about when businesses need to tell their supplier that they want to switch at the end of their contract.

The Association of Convenience Stores has welcomed the move.

ACS chief executive James Lowman said: “Many retailers use third party intermediaries and brokers as part of their business to take away the time consuming aspect of managing energy in-store. However, there are a number of TPIs who mis-sell to business customers and this must be stopped. We have called for a robust code of practice for TPIs and for suppliers to only deal with those who sign up to that code, and are pleased that Ofgem have listened to our concerns on this issue.”

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