You have found yourself tied into a business energy contract, and aren’t happy with how you were ‘sold’ it. Sadly this is not unheard of and we can hear of 2-3 incidences of this in a week.
If you want to cancel a business energy contract because you have stopped trading or are moving premises, this is straightforward. You can read advice here about energy contracts and moving premises.
However, if you have taken a call and agreed a business energy contract over the phone, this may well have been mis-sold.
Are business electricity contracts mis-sold?
A small percentage of these may well be mis-sold to businesses. This could be by an unscrupulous ‘broker’ .
Unfortunately, Ofgem still allow verbal contracts. This simply allows sales teams from unethical brokers to cold call businesses all day long. Personally, I don’t cold call businesses or organisations. There is nothing wrong with cold calling per se, businesses in all sectors use this as a route to market.
It becomes a problem though, when the cold call becomes extremely hard sell. They might have you believe the best deal is about to fall through your finger tips unless you agree there and then over the phone. I have heard stories of people calling back 20 or 30 times a day, and pretend to be from different companies. Or even pretend to be from an energy company (until they talk you through the contract and have to explain where they are actually calling from).
If they hammer the phones all day, they will eventually catch a business owner off guard.
It is possible you may have been given a reasonable rate, but unlikely. We have some recent electricity prices for small businesses – you could compare prices in your region against those you have been quoted. These won’t be completely up to date, so market prices will have moved. It should give you a good indication, however.
Here are some examples of calls you may have received:
You have moved into new premises and the phone didn’t stop ringing
This often happens. At first, you are happy to give some information over the phone. Unfortunately, they can use this information for a verbal contract. At very high rates. Astonishingly, if you politely decline, they can get quite rude and aggressive.
You signed a Level 2 letter of authority
All brokers need a Letter of Authority (LOA) as this tells suppliers they have your permission to discuss your energy supply. However, some brokers will use Level 2 Letter of Authority which gives them the same authority as a company director. They can sign energy contracts on your behalf without informing you first. Only ever sign a Level 1 Letter of Authority.
Your supplier called to say you need to agree a new contract urgently
First of all, this probably wasn’t your supplier. More likely an unscrupulous broker pretending to be from your supplier. Or phishing for information. They might have also been quite pushy and panicked you into agreeing something without checking the price elsewhere.
Business energy contracts are legally binding
We receive several calls a week from business owners who have received a series of cold calls from unscrupulous energy brokers. And are now concerned they have agreed to a contract with high rates.
Commercial contracts are legally binding, currently with no cooling off periods or options to leave early (unless you pay off the rest of your expected energy spend).
You should ask your energy supplier for proof of contract.
This will either be a copy of a signed paper contract, or a recording of the verbal agreement taken over the phone (Ofgem really should ban these).
If your supplier can’t provide this, then there probably isn’t a contract they can hold you to.
If they can provide the verbal recording, you should listen carefully to it.
You can contact the Energy Ombudsman and see if they can offer any assistance. The Ombudsman can mediate between the Business Owner and the Energy Supplier.
If you would like to discuss an issue or need some advice, please get in touch.
Perfect Clarity can help businesses save money on their energy and water contracts. Call 020 3372 6517 for more information.