More than 4,500 organisations across England and Wales have joined a £2 billion group legal claim in a bid to reclaim payments made to “unscrupulous” energy brokers.
Among those to sign up to the claim are 2,801 shops and restaurants, 703 health and beauty businesses, 477 professional services businesses, and 164 sports and community groups.
The claim relates to alleged “hidden commissions” paid to energy brokers from retailers including British Gas, Eon and SSE.
The claim is being led by law firm Harcus Parker. Founding partner Damon Parker said: “We’re delighted that so many organisations have signed up to join the claim.
“Unfortunately, it has revealed to us how widespread and costly this scandal was for businesses, faith groups, and community organisations.
“Unscrupulous energy brokers added undisclosed commissions of up to 10p per kWh, meaning that some larger energy users overpaid by hundreds of thousands of pounds.
“We urge organisations of all sizes from across society to exercise their legal rights and join the claim. We hope to recover compensation amounting to the difference between the price negotiated and the price that a broker acting in its client’s best interest would have achieved.”
The practice of overcharging businesses for their energy costs was first revealed in 2021 when an investigation by Ofgem showed that brokers or third-party introducers (TPIs) might have been charging businesses thousands of pounds in energy commissions without customers’ knowledge.
In October 2022, Ofgem introduced new licence conditions requiring suppliers to declare commissions being paid to energy brokers from customers’ bills in the terms of their contracts.
Earlier this year, Octopus Energy called for energy broker commissions to be capped, after research it conducted found millions of small businesses had a negative experience with a broker in the last year.
Further research by Octopus found 78% of small businesses want commission clearly stated at the point of sale, while 70% want a cap on broker commissions.