In the aftermath of the covid pandemic in 2022, which crushed many small businesses and put many out of work, UK energy prices saw unprecedented spikes, adding further strain on struggling industries. It was not unusual to hear desperate call-ins to the Jeremy Vine show where enterprise owners were declaring their already expensive energy bills were going up triple fold.
Of course, these events were mostly down to poor government policy and unforeseeable geo-political events. Regardless of the cause of the UK’s energy problems, when commercial energy costs rise unexpectedly, it is normal to feel as though you have been duped in some way.
As things spiral out of control and panic is at its peak, opportunists have an easier time gaining an advantage. The unpredictability of variable tariffs is one concern, but unregulated energy brokers can also pose a potential threat to businesses by mis-selling packages at deceptive prices, ultimately resulting in the need to hire legal professionals to assist in gathering energy litigation to support the claims against the brokers or energy suppliers.
What are Mis-Sold Energy Tariffs?
Mis-sold energy tariffs are packages that fail to deliver on the supplier’s commitments. In some cases, you may be promised a certain electricity rate, only to discover that the price has risen substantially once you have enrolled in the tariff. Alternatively, you may be offered a discount for choosing a new tariff, only to discover that the offer does not apply to your business.
Energy providers are not obligated to provide their clients with the best deal. It is therefore imperative that businesses exercise caution when shopping for energy offers. It’s vital to thoroughly read the fine print and fully understand what you’re committing to.
If you believe that you have been mis-sold an energy tariff, you can take measures to safeguard your business. Start by contacting your supplier and clarifying the situation. If they decline to assist you, you can escalate your complaint to the UK’s ‘Energy Ombudsman’.
Varieties of Mis-Sold Energy Tariffs
As we have established, mis-sold energy tariffs are contracts where the terms of the contract have not been fully disclosed to customers, whether through being mis-guided, or through their own lack of investigation. Often, this occurs when an energy broker uses a variety of deceptive methods to entice a customer into signing up.
There are several types of mis-sold energy tariffs that it is worthwhile becoming familiar with, as predatory energy brokers often market them as ‘better alternatives’, but in reality they are simply attempting to maximise the commission they will receive once the customers sign up:
Typically, these types of tariffs provide a set price for energy for a defined period of time ranging from one to five years. Even if rates rise during that time period, the customer will still be required to pay the fixed rate, which at first may seem like a good deal, but may actually cost substantially more in the long run than a variable rate.
While green tariffs are marketed as eco-friendly, they are often more expensive than other tariffs. Prior to enrolling in any green deal, it is imperative that you fully understand the terms.
A discounted tariff offers a lower energy price for a specified time period; however, it is important to verify what the price will be after the discount period has expired. If you do not verify this, you may end up paying more than if you had chosen the standard tariff.
With cashback tariffs, you will receive a refund after you have consumed a certain amount of energy. It should be noted, however, that these tariffs can be more costly than standard tariffs, and that the customer may never actually receive any cashback.
Safeguard Yourself From Mis-Sold Energy Tariffs
With UK energy prices on the rise, businesses are naturally looking for ways to reduce their expenses. One way to achieve this is by shopping around for the best energy deals. As there are a large number of energy tariffs available on the market, as well as a large number of brokers trying to land a deal, it is becoming increasingly difficult to determine which deal is the best for a business.
As a result, the business landscape has become a fertile ground for unregulated malpractice, but there are various ways businesses can guard themselves against mis-sold energy tariffs.
Firstly, always shop around and compare different deals before signing up for anything. By doing so, you will be able to determine which tariff offers the best value for your business. Additionally, it is important to always read the fine print of any agreement before signing it, in order to ensure that there are no hidden fees or charges that may come back to haunt you in the future. Last but not least, it is wise to consult with the customer services of said energy brokers, in order to fully break down and examine all the details of any offers to determine which one is the best for your business.
The Advantages of Shielding Your Business from Mis-sold Energy Tariffs
As a result of rising inflation, the price of everything is skyrocketing, similar to the ride on an out of control rollercoaster: every time it seems like it cannot get any higher, it does. It goes without saying that businesses cannot afford to be duped by an ill-intentioned energy broker right now, so it goes without saying that the more proactive and aware you are if you are considering a new tariff, the better off you will be, now more than ever.
The savings you achieve on your energy bills will contribute to an increase in your business’s cash flow, which is the lifeblood of any enterprise. The more you are aware of firms that attempt to mis-sell packages, the better your chances of avoiding overpriced energy tariffs, which in turn will result in your business flourishing.
Resources to Assist with Mis-sold Energy Tariff Protection
As a business owner in the UK, it is imperative that you understand the risks of mis-sold energy tariffs. The good news is that there are numerous resources available to help UK businesses protect themselves against deceptive energy brokers.
First, it is important to understand the difference between fixed and variable tariffs and how each can be advantageous to you. A fixed tariff provides a constant energy price, whereas a variable tariff fluctuates according to market conditions.
Businesses often find fixed tariffs to be the best option, as they provide stability and predictability. Even so, comparing different providers is always a good idea to ensure that you receive the best deal. Despite the fact that variable tariffs may be more expensive in the short term, they may offer savings in the long term if prices drop. Once again, comparing different providers to find the best deal is crucial.
Once you have determined which type of tariff is right for your business, you need to shop around and compare different offers.
It is also important that you are familiar with the rules and regulations regarding mis-sold energy tariffs.
Businesses in the United Kingdom must protect themselves against mis-sold energy tariffs. With increasing living and business costs, it is important to maximise every available savings, and finding the right tariff that can have a substantial financial impact. If you understand your rights and obligations when choosing an energy supplier, you can ensure you are receiving the best deal for your business and are avoiding being exploited through mis-selling practices.