The Association of Convenience Stores (ACS) has welcomed proposals to tackle misleading marketing by brokers toward business customers, in a submission to the energy regulator Ofgem,
Ofgem has asked Government for the powers to take action against brokers or third party intermediaries (TPIs) that mis-sell to businesses by marketing energy contracts in a misleading way.
Current provisions only cover activity with domestic consumers, which prohibit unfair commercial practices such as misleading or aggressive marketing as part of their license conditions. Ofgem is also working with suppliers and brokers to set up an industry-wide code of practice for brokers.
Research conducted by Ofgem has shown that the usage of brokers is common in the business market, with around one in six businesses using a broker to consider a switch of their gas or electricity supply.
ACS chief executive James Lowman said: “We support Ofgem’s attention on the issue of rogue brokers in the marketplace, but believe that the regulation of brokers and TPIs should be the same across the domestic and non-domestic sectors.
“The proposals in the consultation go some way to achieving this, but must be underpinned by a robust, single, enforceable code of practice that regulates TPI activity for the benefit of local shops and other small businesses who are plagued by aggressive cold calls, falsely time limited deals and misleading marketing practices.
“As we have seen this week from the action taken against SSE, mis-selling of gas and electricity is still a significant problem in both the direct energy market and the broker market. We urge Ofgem and Government to continue to look at ways to ensure that local shops and other businesses are not taken advantage of on energy.”
In its submission, ACS has recommended that the new powers proposed by Ofgem be implemented before the end of 2013.