Are You Aware Of The Dangers When Securing an Energy Contract?

The Nationwide team are helping customers where the T&Cs of other brokers represent a huge risk to their business. Several operators have approached us for help.

The common elements are:-

• They agreed a renewal contract up to 2 years before the current contract ends.

• The contract is between 3 – 4 years in length

• The contract rates are much higher than were available at the time or now

Two examples are as follows:-

• At the peak of the energy crisis the customer agreed a 4-year contract electricity contract at 78ppkw

• In December ’23 the customer agrees a 44-month contract at 43ppkw when average prices were 24-30ppkw

While the advice in such a situation may be to agree new contracts with the existing supplier to prevent the change of supplier, the concern is that these brokers may have clauses in their T&C’s meaning that if their contract doesn’t go live, they will claim their whole commission or another fee which can be even higher.

These charges range from several thousand pounds to tens of thousands for large supplies.

Nationwide as your trusted partner has a duty of care to customers and wants to quantify the potential risk or loss in such situations. Therefore, we are asking customers to confirm the existence of such punitive clauses before offering any alternative contracts with their existing suppliers.

In many situations, the difference in comparative savings means that staying with your existing supplier is much cheaper. However, it won’t be clear at the outset and we ask customers to consider that they may have to pay these charges upfront and they will have this stress in addition to their existing business pressures.

We believe that these contracts are invalid as the broker fails to disclose their commission or these penalties which should be seen principal terms of the contract. From 1st October 2022, brokers when arranging energy contracts have had to disclose commission to customers as it is regarded as a principle term.

Suppliers are required to ensure that they and TPI’s working on their behalf disclose commission, which will be identified on the customer’s bill.

Customers should be aware of these dangers when agreeing energy contracts with other brokers and suppliers as this can risk being pursued for these costs in the future.

If you require any help or guidance, get in touch:

Call Us: 024 7632 8995

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