Secret energy commissions: Are you owed compensation?
Many businesses have recently been awarded substantial compensation from their brokers/agents for receiving secret energy commissions, and you may be owed the same.
The issue of secret commissions has gained increasing attention over the last couple of years. Much of the attention has been directed at commissions received by car dealerships in relation to motor finance. This is due to the potential scale of affected individuals and total compensation which may be payable. A less publicised, but no less significant and developing area, are commissions received by agents in the procurement of energy supplies.
We are acting for one of the largest private care home providers in the UK in relation to the recovery of secret commissions received by its previous energy consultant. A fee arrangement was agreed between the parties and our client discovered several years later that the consultant was receiving unauthorised commissions on top. The commissions were incorporated by the energy supplier into our client’s energy bills. As this had gone unnoticed for several years, our client had unknowingly paid significantly more for energy than it should have. Accordingly, we have assessed that our client may be due large redress.
What are commissions?
It is important to note that commissions are a perfectly lawful form of remuneration, which are usually paid to agents for performing a specific task. Indeed, commissions are common in certain industry sectors. For example, it is standard practice for estate agents to work on a commission basis and charge a percentage of the final purchase price. It is only where commissions are not properly disclosed that that they are unlawful. In other words, they are secret commissions which may also amount to a bribe.
If secret commissions were received by agents, then you may be entitled to recover those commissions. Where a business operates multiples premises which used energy supplies brokered by an agent, or where the contract has run for multiple years, then the secret commissions may be significant. Further, the commissions are likely to have been added on to your energy bill, thereby increasing your costs.
How can I tell if secret commissions were received by my energy broker?
By definition, you will not be aware that your agent has obtained a secret commission. We have, however, produced the below flow diagram which can give you an indication as to whether your broker may have received a secret commission.
*The government has compiled recent and historical average energy prices for reference.
How can Ellis Jones help?
If you suspect that your agent received secret commission payments and would like to recover these, then please contact us. We can undertake a legal assessment of your matter to determine whether you are owed compensation from your broker.
If you wish to discuss a potential claim or complaint, please contact Wai Chan, a solicitor in our Banking and Finance Litigation team at wai.chan@ellisjones.co.uk.
How can we help?
When you submit this form an email will be sent to the relevant department who will contact you within 48 hours. If you require urgent advice please call 01202 525333.
