Retailers are being mis-sold utility contracts costing thousands of pounds per month, after being targeted by brokers looking to take advantage of the energy crisis.
This month, politicians urged prime minister Boris Johnson to scrap energy taxes after experts warned of a potential hike in utility bills in spring.
Retailers reported seeing their monthly bills more than double last year after their energy providers collapsed as a result of increased wholesale gas prices.
The crisis has led to “sharks” attempting to exploit affected retailers. Andrew Board, of Premier Newton Hall in County Durham, told Better Retailing he was locked into paying £2,000 per month until October 2022 after being mis-sold a contract by a broker.
“We had taken on the shop and we were stung by a local broker promising us good rates. They attempted to gain our trust by putting on the act of being a reliable local lad. It was all very convincing.”
Expert advice to manage business energy spending this winter
Neil King founded Wiser Utilities to help retailers fight back against being mis-sold energy deals. He told Better Retailing: “Education is the only way we’ll learn how to avoid these sharks. I spoke to one retailer who was moved to a new supplier after his previous one ceased trading.
“He invited a regular customer, who just happened to be an energy broker, to help find a better deal.
“After signing the deal, he continued to receive bills from his old supplier costing more than £2,000 per month.
“The broker targeted the shop and used regular purchases to build trust. He hasn’t been back since.”
King added that the broker discreetly moved the start of the new contract with the new supplier to April 2022 to avoid losing their commission, leaving the retailer paying out-of-contract rates for another six months.
Another tactic used by brokers, according to King, was claiming they could get cheaper rates, but failing to mention they would be tied into longer-term contracts.
Energy & fuel crisis hits shop sales and overheads
Explaining what retailers should look out for, Utility Hut founder George Bias said: “Those brokers trying to mislead businesses will be pushy and create a ‘fear factor’ with a hard sell. They’ll be forceful in getting retailers to sign contracts on the spot.
“It’s easy to panic. Just take a step back and tell them you’ll compare tariffs first. Don’t sign anything without having done a comparison.”
Christine Hope, of Hopes in Longtown in Hereford, began receiving cold calls from energy providers trying to persuade her to switch after her supplier went into administration. “They were forceful in trying to get us to sign a contract,” she said.
“It was useful to have a reliable broker to help prevent panic and make a plan.”
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