How charities can claw back thousands of pounds from rogue energy brokers

Damon Parker, Senior Partner Harcus Parker

CHARITIES joining a group action could receive thousands in compensation from energy companies in the wake of a secret commissions scandal.

Despite charitable donations reaching a record high of £12.7 billion this year, record numbers are closing their doors. Although the sector faces an array of challenges, many of the charities folding cite high energy costs as the main reason for their closing.

Charity leaders will be aware that energy costs have risen as a result of Russia’s invasion of Ukraine. What they may not know, is that their energy broker may have also taken a secret commission in exchange for fixing their energy costs at a higher rate, costing their charity thousands.

How are charities affected by the secret commissions scandal?

In 2021, the UK’s energy regulator Ofgem revealed that brokers or third-party introducers (TPIs) may have been charging businesses thousands of pounds in energy commissions without customers’ knowledge.

Although the domestic energy market is heavily regulated, the commercial energy sector remains largely unregulated. It is relatively complicated, and charities are often attracted by the idea of assistance from a broker. In some cases, however, brokers have caused customers to enter unfavourable contracts, to their own advantage and that of the energy supplier. Some (or all) of the value of the uplift in the unit price for the duration of the contract has been paid to the broker by the supplier.

Across the country, rogue brokers have targeted charities of all sizes. However, because the additional cost was hidden within organisations’ energy rates, many were unaware that they were overpaying. With charities already feeling the pinch and with winter fast approaching, now is the time to act and discover whether improper broker practices took place and whether a claim can be made.

By joining Harcus Parker’s no-win, no-fee group action charities will be best placed to identify whether they are eligible for a claim and how much this would account for.

Next steps for charities

Charities are well within their rights to make a claim seeking to recover costs. They must first provide details of the energy contracts they have entered into over the last few years including the supplier’s name, broker used, and the contract duration. From these details, the Harcus Parker team can verify if a claim is valid. There is no up-front cost as the team will only take a percentage of any damages awarded to the claimants (no win, no fee).

Once a verified claim has been identified, Harcus Parker will collate the provided information and make representations to the defendant and to the Court. A portion of the Harcus Parker fee will also be donated to a relevant charitable organisation.

Numerous charities across England and Wales have already joined the claim – alongside thousands of organisations in other sectors. New claimants can start their journey here.