Billions In Pay-out For Businesses Over Hidden Energy Bill Charges

Written By Mphatso Ndalama

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March 20, 2024

Businesses taking legal action against their energy supplier for mis-sold energy

In what is shaping up to be one of the largest financial scandals since the Payment Protection Insurance (PPI) uproar, energy customers across the UK are poised for a significant financial windfall. This comes in the wake of a legal decision that revealed the widespread practice of hidden fees in energy bills, potentially setting a precedent for numerous businesses to challenge their energy providers over deceptive practices.

The case that has caught national attention involved Queenie’s Casino Slots, a small business based in County Durham, which successfully recouped £14,000 from the energy giant, Engie. The court’s ruling highlighted a “deliberate concealment” by an energy broker of additional fees, marking a significant victory for transparency and accountability in the energy sector.

We are pleased to have won damages against the supplier. It may not seem like a huge amount but for a small business like ours, it makes a big difference.

Andrew Smith, owner of Queenie’s Casino Slots

This sentiment is echoed across the business community, which is increasingly vigilant about unfair practices in energy billing. Victoria Myers, a lawyer at Energy Solicitors, warned, “This has the potential to be the next PPI scandal,” pointing to the thousands of businesses potentially affected by misleading and mis-sold contracts.

Energy broker’s commissions can inflate energy bills by approximately 10%. On average, these commissions amount to about 1.7p per unit of energy, a significant mark-up on the standard cost of around 10p per unit.

In response to growing concerns, Ofgem, the UK energy regulator, has acknowledged the need for greater transparency and regulation. Ofgem is committed to ensuring that customers are “properly informed and protected” through enhanced regulation of energy suppliers.

The implications of the landmark case are far-reaching, with Callum Thompson, the managing director at BEC, suggesting it could “open the floodgates” for further legal action. “What we are looking at is a multi-billion-pound issue on a similar scale to the PPI scandal,” Thompson noted, underlining the potential for a significant number of businesses and organizations to reclaim unfair charges.

As the energy sector grapples with this unfolding scandal, the call for greater accountability and transparency has never been louder. With billions at stake, this case may indeed mark the beginning of a seismic shift in how energy contracts are negotiated and disclosed, ensuring fairer treatment for businesses nationwide.

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