Posted on 14 February 2014 by Vicky Ellis
Business energy brokers who act as go-betweens for consumers and suppliers will have to sign up to a new code of conduct under new plans to clear out the cowboys.
A number of dodgy brokers have given the sector a bad name and this is the latest attempt to clean up brokers’ reputations once and for all.
Regulator Ofgem is proposing a new code of practice for brokers and other third party intermediaries (TPIs) to be completely clear with businesses about their fees, the contracts they offer and which suppliers they represent.
The proposals will require suppliers to only work with brokers that have signed up to the code.
Ofgem said the code and regulation for suppliers should be in place by the end of the year.
Maxine Frerk, Partner for Retail Markets at the regulator 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.”
She added that making TPIs “accredited” will ensure suppliers and TPIs are “jointly accountable for giving a high quality service” to business consumers.
Ofgem plans to set up independent industry body with powers to expel a TPI if it doesn’t comply with the code.
While many have been calling for more regulation, not all in the industry will be pleased with the news. Some have suggested an official code of conduct means brokers will be licensed like suppliers. Their concern is that the code could reduce competition.