Ofgem is proposing a new code of practice requiring brokers and other TPIs to be completely clear with businesses about their fees, the contracts they offer and which suppliers they represent. The proposals also require suppliers to only work with brokers that have signed up to the code.
Suppliers are to be set new rules which will protect businesses from misselling by some energy brokers. The new rules Ofgem is proposing mean that if suppliers want to market deals through a broker, or a TPI they would have to use one which is accredited under a new code of practice.
Ofgem has already put in place rules to give businesses better protection and more clarity on their options when their contracts come to an end. And since November 2013, it has had powers to act against TPIs that are marketing energy products or services to businesses in a misleading way.
To further increase protection, Ofgem and stakeholders have developed an industry-wide code of practice for TPIs to follow so that they treat businesses fairly when advising them on the best deals. Once finalised it will require TPIs to be completely transparent about the fees for their services, the suppliers they are affiliated with, and the contracts they offer. And if suppliers want to market deals through a broker they will have to choose one which complies with the code. The code and regulation for suppliers should be in place by the end of the year.
Maxine Frerk, Partner for Retail Markets at Ofgem said: “We are determined to clamp down on poor practices by some TPIs and provide more transparency in this market. They also have to improve their overall training and the way they deal with customers. We have already obtained from Government, powers to take enforcement action against misleading TPI behaviour. The next step is finalising the industry-wide code practice for TPIs. By requiring suppliers to only work with accredited TPIs, we will ensure that suppliers and TPIs are jointly accountable for giving a high quality service to business consumers.”