Sadly, the mis-selling of energy contracts to MATs, Academies and Schools is a daily occurrence and with one energy broker proclaiming “another day, another mug”, something must now be done to eradicate this shocking practise.
Powerful Allies is the only Approved Energy Partner for the Institute of School Business Leadership (ISBL), The Catholic Independent Schools Conference (CISC) and Achilles, the public sector supplier vetting protocol. With over 250 Academy and MAT clients, we take the subject of transparency, trust and honesty very seriously indeed. Indeed, we have made it a “mission” to expose rogue practices in the sector.
This Bulletin is intended to highlight some of the more common malpractices and to provide guidance so you can avoid becoming a victim.
Very few clients are aware that the UK commercial energy market is effectively unregulated by Ofgem, unlike Microbusinesses and Domestic users who benefit from the usual consumer protection we have all treasured for so long.
Neither is there “self-regulation” or even a simple Code of Practice to protect corporate clients, the category into which larger schools fit.
Consequently, a “Faustian Pact” can exist between suppliers eager to improve their market share and unregulated brokers, which include so-called Local Authority Procurement “Frameworks” where lack of transparency has been a major concern for many years.
We see a deluge of mis-selling bordering on fraudulent action by brokers struggling to survive, and with over half of all UK brokers described by Plimsoll as financially “mediocre or in danger”, even before COVID 19, their increasingly shocking behaviour is entirely predictable. On top of this, we see increasing financial pressure on Local Authority Frameworks to generate income from energy procurement to fill budget deficits.
In our experience there are only a handful of energy brokers out of almost 2500 nationally which could be described as “trustworthy”. And by that, we mean they are mature, transparent, honest in presentation of data, providing clear and unambiguous fixed price contracts, supportive of clients rather than exploitative, applying sensible margins, highly retentive of clients and able to engage with clients as a valued part of their management team. Just a handful out of 2500. So how are the others abusive of client trust?
There are degrees of abuse of trust by energy brokers, categorised as
On a daily basis, my team helps schools extract themselves from actual mis-sold contracts. The range of “scams”, for that is what they are, is growing rapidly and includes;
Again, it is not for us to determine when mis-selling crosses the line to become fraud, but there are some blatant examples where fraud is clearly intended, as follows;