Government extends free support with energy contract disputes to more businesses

More businesses will be able to access free support to resolve issues with their energy contracts, as part of government changes aimed at tackling "cowboy practices" by energy suppliers and brokers.

Free help from the Energy Ombudsman on tackling disputes with their energy supplier is currently only available to micro businesses with up to 10 employees, but it will be extended later this year to small businesses employing up to 50 people.

The ombudsman can order suppliers to provide compensation of up to £10,000 or resolve issues such as raising standards for customers, or crediting or amending customer accounts.

The government described the change as "a first step in a crackdown on rogue energy brokers targeting small organisations with thousands of pounds in hidden fees".

Amanda Solloway, minister for affordability and skills, said:

"All businesses deserve to get a good service from their energy supplier, and today's changes will empower small businesses with free redress support via the Ombudsman.

"This is just the beginning. Rip-off energy brokers have no place in our market and we will act to raise standards for customers."

Improving energy services for businesses

Alongside the Energy Ombudsman announcement, Ofgem also unveiled wider plans to improve energy services for businesses and other non-domestic customers:

From 1 July 2024:

• Expand the standards of conduct to apply to all businesses of any size, rather than just micro businesses. This will give Ofgem powers to take action against suppliers that do not treat non-domestic customers fairly.

• Introduce a new supply licence rule for non-domestic suppliers which requires them to signpost micro businesses to Citizens Advice and Citizens Advice Scotland, who can offer support and advice when they have an issue. This will also apply to small business consumers from December 2024, subject to the new definition entering legislation.

A changes expected to be in place by the end of the year:

• Expanding the requirement for a contract's principal terms to clearly display any broker fees from micro businesses to all non-domestic customers. This will apply to contracts signed on and from 1 October 2024 and suppliers must make this information available upon request.

From December 2024, in line with the government's proposed new small business consumer definition entering legislation, Ofgem will also:

• Update the complaints handling standards to ensure suppliers put in place suitable complaints processes for small businesses and point them to the Energy Ombudsman when a customer does not feel the issue has been resolved.

• Implement a requirement for suppliers to only work with energy brokers that are members of a redress scheme when securing small business contracts.

Tim Jarvis, Ofgem's director general for markets, said:

"Too many businesses have experienced issues with some energy suppliers, from difficulty getting the right contracts, unexplained price hikes, and poor customer service.

"We've worked hard to understand the breadth of issues and where the powers we have to tackle them can be improved. These new rules will help ensure businesses get the service they deserve."

Relevant resources

Top ways to save energy: Useful advice from Planet Mark

Plan it with Purpose: Sustainability hub for small businesses