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Ofgem review into third party intermediaries (TPI's or energy brokers)
Business Cost ConsultantsMay 04, 2012 13:20 BST
As independent consultants, we at BCC welcome this long-awaited initiative, and we’re sure that other reputable consultants and brokers in the industry will be equally pleased that this review is taking place.
The intention is to achieve full transparency so that customers know exactly what they are paying indirectly to the agent. Unfortunately many of these brokers pose as consultants offering a “free” or “low cost” service.
Third party brokers have a significant impact in the business energy market. Many independent or new entrant suppliers use them almost exclusively to reach new customers. However, Ofgem have expressed concern about some recent broker misselling cases with which they have had no powers to deal with.
As part of the consultation Ofgem are proposing a three pronged approach to help business customers engage more effectively in the market, leading to greater and more effective competition. Ofgem want to introduce:
- a new standard licence condition (SLC) on non-domestic suppliers governing the sales and marketing activities of both the supplier and their representative (and/or new Standards of Conduct;
- an Accreditation Scheme for third party brokers Codes of Practice (CoP);
- they have asked the Department for Business Innovation and Skills (BIS) for powers to enforce the BPMMRs so that Ofgem can take enforcement action directly against non-domestic TPIs.
It is hoped that this approach should:
- help more business customers be aware of their contract terms;
- improve the supplier switching experience for business customers;
- increase confidence when using third party intermediaries;
- improve customers‟ trust in suppliers.
What are your thoughts on this retail review?
We will provide more info asap on the outcome of the review.