Energy Ombudsman Support Extended to 99% of UK Businesses

How can small businesses thrive if they are bogged down by unfair energy practices?

In a significant move to protect these vital contributors to the economy, the UK government and Ofgem have expanded the role of the Energy Ombudsman to offer free support for resolving energy disputes.

This expansion covers 99% of businesses in Great Britain, specifically targeting organisations with fewer than 50 employees, who can now settle disputes without resorting to expensive legal proceedings.

Empowering the Energy Ombudsman

The Energy Ombudsman now has the authority to order suppliers to provide compensation of up to £10,000 or take corrective actions, such as amending customer accounts or raising service standards.

This development is part of a broader initiative to curb deceptive practices, such as hidden fees or high-pressure sales tactics, as well as to provide small businesses with the necessary tools to demand fair treatment from their suppliers and energy brokers.

Regulating Energy Brokers for Fairness

The government is also planning to consult on regulating brokers and other third-party intermediaries later this year to ensure transparency and fairness in the energy market.

These reforms are designed to fill a protection gap for smaller organisations, which often lack the resources to negotiate better terms or challenge unfair practices effectively.

Continuous Access to Dispute Resolution

Furthermore, the government and Ofgem have introduced new regulations requiring energy suppliers to only work with brokers who are part of a redress scheme. This ensures that small business customers have continual access to free and fair support in any disputes.

Additionally, energy brokers are now required to provide full transparency over their fees, helping customers to make more informed decisions.

Strengthening Support Mechanisms and Enhancing Contractual Transparency

From 1 July 2024, an additional new rule for supply licences will direct micro-business consumers towards Citizens Advice and Citizens Advice Scotland for support.

This provision is set to include small business consumers from December 2024.

Additionally, by the end of the year, Ofgem intends to require that all non-domestic customer contracts clearly display any broker fees. This transparency will apply to contracts signed from 1 October 2024, with suppliers obligated to provide this information upon request.

These changes, poised to take effect later this year, form a key part of the government’s strategy to fortify economic security and promote the growth of small businesses. When enacted, they promise to provide a more solid framework for small businesses to manage their energy needs without the risk of exploitation, helping UK businesses stay powered and protected in the complex energy market.

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