Eon will no longer accept letters of authority (LOA) from third party intermediaries not signed up to its TPI Agreement, even if they already have an LOA in place.
The energy supplier notified TPIs of the move last Friday with the new rules coming into effect as of Monday (9 March).
Brokers and TPIs use letters of authority to act on behalf of customers. They are legal documents that mean TPIs can sign them up to a supply contract and act as their intermediary for things like energy services, billing validation and reconciliation.
Eon said some brokers and TPIs have abused letters of authority. In a blog post director of energy sales, Iain Walker wrote:
“Increasingly – and I’m talking an average of 5-10% of incoming contact in recent months – we’re being presented with a Letter of Authority (LOA) seemingly signed by a customer and giving permission for someone else to manage their account, agree terms or sign contracts on their behalf.
“Except in those one-in-ten cases, that LOA wasn’t signed by the customer, or was signed without their full knowledge and consent.”
Walker said small businesses are sick of being hounded by brokers. While Ofgem is taking action, he said the review could run for “at least another year before substantive action results”.
As such, non-registered brokers “will no longer be able to access customer data or manage customers’ accounts on their behalf”, he added.
An Eon spokesperson said its move has been welcomed by small business groups such as the Federation of Small Businesses.
Eon’s letter to TPIs states that:
- It will accept LOAs from those that have signed its TPI Agreement
- It will not accept LOAs directly from sub-brokers that have not signed the TPI agreement
- TPIs that want to submit LOAs on their behalf have to take full responsibility for its legitimacy
- Those LOAs need to be dual branded with the aggregating TPI and the sub broker’s company names
Eon urged other suppliers to take a similar approach.
“There is only so much we can do,” wrote Walker. “TPIs, other suppliers and Ofgem need to play their part too.”
TPIs told The Energyst they understood the need to weed out bad actors and step up safeguards to prevent fraud, but questioned whether Eon could implement the action regarding existing LOAs, where legally and honestly obtained.