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From October 2024, all UK energy suppliers must disclose third-party intermediary costs to non-domestic customers using a standardised format, ending the era of hidden commissions that historically inflated business energy bills by up to 10 pence per kilowatt-hour. Trustworthy brokers now maintain mandatory registration with the Energy Ombudsman service, provide complete transparency regarding commission structures before contract execution, and comply with Alternative Dispute Resolution schemes. Small businesses with fewer than 50 employees can access free dispute resolution, with compensation of up to £10,000 available for mis-selling cases. The complete structure reveals essential protections and escalation pathways.
After years of mounting concerns over opaque commission structures and mis-sold business energy contracts, the UK government has initiated a thorough regulatory overhaul targeting Third Party Intermediaries in the energy sector.
The Department for Energy Security and Net Zero received 85 stakeholder responses overwhelmingly supporting direct regulation of energy brokers, acknowledging that industry self-policing has failed.
The government’s preferred approach involves a ‘General Authorisation’ regime, though stakeholders remain divided between general and specific authorisation models.
Implementation is expected throughout 2025, focusing primarily on brokers operating commission payment models.
This regulatory system addresses critical market failures including undisclosed commissions, pressure-selling tactics, and inadequate dispute resolution mechanisms that have particularly impacted small and medium enterprises steering energy procurement. The proposed framework will establish mandatory commission transparency as a core principle for all regulated energy brokers. Modern procurement services now handle everything from usage profiling through to contract execution, ensuring businesses secure competitive rates without administrative burden. Effective energy management requires standardisation of formats and verification processes that ensure accurate metre readings and consumption data across all supplier contracts. Businesses seeking competitive contracts should consider services that leverage supplier competition to reduce total landed costs whilst maintaining price certainty.
From 1 October 2024, Ofgem’s mandatory fee disclosure rules fundamentally altered transparency requirements across the entire UK business energy market.
These regulations extend previously limited microbusiness protections to cover all non-domestic energy customers, regardless of size or consumption levels. Energy suppliers must now disclose third-party intermediary costs within contractual principal terms for every new agreement.
The standardised disclosure format requires:
All energy suppliers must modify contract templates accordingly, though implementation approaches vary across providers. These changes emerged from Ofgem’s consultations on non-domestic energy policy to create fairer treatment for business customers.
Contracts signed before 1 October 2024 remain unaffected by these transparency requirements.
For years preceding the October 2024 reforms, energy brokers systematically exploited UK businesses through opaque commission structures that inflated energy costs across the commercial sector. The industry generated £2.25 billion annually in hidden commissions, adding up to 10 pence per kilowatt-hour to business energy prices. Approximately 90% of microbusinesses using brokers experienced mis-selling through pressure tactics and contracts disguised as quotation calls.
| Exploitation Method | Impact | Example |
|---|---|---|
| Hidden Commissions | Bills inflated without disclosure | Nim’s Fruit Crisps: £2,500 to £15,000 monthly |
| Deceptive Contracts | Verbal agreements binding | Quotation calls became legal contracts |
| Supplier Recommendations | Non-competitive options chosen | Brokers prioritised commission over savings |
The unregulated market conditions enabled brokers to exploit legal loopholes, leaving 3.5 million businesses entitled to compensation. High-value claims exceeding £40,000 against major suppliers like Engie have recently been heard in court, with decisions expected imminently.
The October 2024 regulatory reforms have established clear markers that distinguish legitimate energy brokers from fraudulent operators. Trustworthy brokers now provide complete transparency regarding commission structures and fees across all business sizes, not just micro businesses.
These professionals prioritise client needs over hidden profit margins, offering unbiased advice grounded in full disclosure.
Key differentiators include:
Businesses can verify broker legitimacy by confirming Energy Ombudsman registration and demanding upfront commission disclosure before engaging services. Ofgem’s regulatory framework ensures brokers enforce standards for accurate billing, clear communication of contract terms, fair switching processes, and effective complaints handling throughout the customer relationship. Reputable brokers also provide ongoing support and monitoring of contract end dates and market movements to ensure businesses maintain optimal tariffs and budget predictability. Transparent operators maintain audit-ready documentation throughout the process, ensuring no hidden fees and complete accountability for all recommendations and transactions.
Business energy customers now possess clearly defined rights to formal dispute resolution through mandatory complaints processes and regulated redress schemes.
From December 2024, suppliers must provide structured complaints handling procedures for small business consumers, with unresolved issues escalating to the Energy Ombudsman.
Brokers can only operate with suppliers if registered with approved Alternative Dispute Resolution schemes, ensuring businesses have recourse when service standards fall short.
The annual registration fee of £300 + VAT ensures brokers maintain their mandatory membership with these approved ADR bodies.
When disputes arise between businesses and energy brokers, regulatory structures establish specific procedural requirements that customers must follow to exercise their complaint rights.
Direct resolution attempts with the broker represent the mandatory first step, as brokers maintain internal complaints procedures through Ofgem-recognised ADR scheme membership. Brokers must provide written responses within established timeframes before external escalation becomes available.
Escalation pathways depend on broker registration and response timing:
Customers retain 1 year from receiving deadlock letters to initiate ombudsman proceedings, with extended timeframes possible under specific circumstances. When raising complaints, customers should clearly explain the problem and prepare their business energy account number alongside supporting evidence to facilitate the resolution process.
Regulatory structures governing business energy markets now mandate broker registration with approved Alternative Dispute Resolution schemes as a fundamental consumer protection mechanism.
Energy suppliers face licence conditions requiring them to work exclusively with brokers registered under Qualifying Dispute Settlement Schemes. These arrangements address significant consumer harm, with suppliers receiving approximately 1,000 monthly complaints about third-party broker activities in 2019, representing 6% of total supplier issues.
Approved schemes include the Energy Ombudsman, Dispute Resolution Ombudsman, and Utilities Intermediaries Association, all maintaining compliance with Alternative Dispute Resolution for Consumer Disputes Regulations 2015.
These entities possess authority to require brokers to pay compensation, provide apologies and explanations, or implement remedial actions. Governance structures guarantee independence through appointment processes separated from investigated parties, protecting scheme integrity whilst serving microbusiness and small business customers. Registration confirmation is typically issued within 5 working days following completion of verification checks by the dispute resolution provider.
Since October 2024, small businesses in the UK have gained exceptional access to formal dispute resolution mechanisms for energy-related conflicts through expanded ombudsman services and regulatory mandates.
UK small businesses now access free, comprehensive energy dispute resolution covering suppliers, brokers, and network operators through expanded ombudsman services.
The Energy Ombudsman now provides free support to businesses with fewer than 50 employees, covering disputes with suppliers, brokers, network operators, and Green Deal providers. This service encompasses 99% of Great Britain’s businesses and includes powers to order compensation up to £10,000.
The resolution system addresses:
Energy brokers must register with qualifying ADR schemes to serve small business customers legally.
