Yorkshire companies potentially owed £7bn by energy brokers

Almost 280,000 businesses in Yorkshire and the Humber could be eligible to a share of an estimated £7bn, according to figures from Business Energy Claims.

According to the latest figures from the Department of Business Energy and Industrial Strategy (BEIS), the region is home to 413,500 businesses. The energy regulator, Ofgem, estimates that 67 per cent of all businesses, charities and public bodies buy their energy through a broker.

Business Energy Claims, which recovers money from hidden commissions paid to unscrupulous energy brokers, believes almost all (94 per cent) these have been mis-led and mis-sold energy contracts – and could be in line to recoup an average of £25k each.

Business Energy Claims have discovered a significant number of examples of hidden charges and different forms of mis-selling by energy brokers throughout the industry, in what is being described as the new PPI.

Although it has claims of more than £1m for multiple organisations, the average claim amount for their clients is £25k.

It believes up to 280,000 of the 413,500 business in Yorkshire and the Humber are likely to be eligible for compensation, meaning that the region could potentially access billions to invest back into growth and job creation opportunities.

Examples of mis-selling include not declaring commission fees, favouring certain suppliers, misrepresenting the number of quotes sought on a company’s behalf and failing to provide the correct advice, such as suggesting long-term or pass-through contracts which weren’t in the best interest of the broker’s client.

Both Ofgem and BEIS are actively assessing the impact of energy brokers mis-selling and the potential mis-selling through hidden commissions within business energy contracts, demonstrating a clear cause for concern within the energy sector, with the former introducing remedies for 2022.