Price comparison websites and energy brokers will be regulated in a bid to end their alleged “license to scam”, the energy consumers minister has said.
Miatta Fahnbulleh said a new framework to regulate third-party intermediaries (TPIs) could end hidden fees “and other unethical tactics”.
Energy watchdog Ofgem published a report earlier this year which found examples of business stakeholders’ “mis-selling concerns”, for example, being “locked into a contract at higher prices than they needed to be for multiple years, which can severely impact business viability”.
Organizations
The energy consumers minister said: “Too many families and businesses, already struggling with the effects of the energy crisis, have fallen victim to poor practices by energy intermediaries. These unregulated third parties and rogue brokers have had license to scam consumers without oversight or facing consequences.
“We will bring these intermediaries under control and put an end to hidden fees and other unethical tactics.
“A new regulatory framework, coupled with clear rules and standards, will restore trust and protect consumers while helping to build an energy market fit for the future – one where these organisations help people save money through fairer practices and show them the best ways to reduce their carbon footprint.”
Ms Fahnbulleh’s department launched a consultation on regulating TPIs on Friday, which ends in mid-November.
The Government’s proposal would make it mandatory for TPIs to provide transparent information on their fees and clarity over the terms for their contracts.
According to Ofgem’s 2024 Non-Domestic Market Review Decision report, “with the absence of formal sector regulation of TPIs, there is a protection gap for some energy consumers who engage with the energy market through TPIs”.
It added: “In most cases, TPI service fees are paid as part of a consumer’s energy bill from their supplier, with the supplier paying fees to the TPI from the payment they receive from the customer.
“This structure has led to some customers being unaware that they are paying a separate fee to the TPI and how much.”
