The business buyer should beware in the UK’s energy free-for-all

Dug Heath runs a successful business finishes parts for custom cars and bikes. In July 2007, he moved to premises in Baldock. A month later, he received a phone call from a rep, claiming to be from an electricity metering company. The rep told Dug he was on “emergency rate,” and offered to find Dug a cheaper deal. The rep then transferred the call to BizzEnergy. The pitch had taken no more than five minutes.

A day later, a bill from his current supplier arrived and Dug realised just how big a mistake he had made. The premises was not on emergency rate. “I have now been told that there is no such thing as emergency rate,” says Dug. What is more, the new contract would cost him an extra £6000 over the next four years.

When Dug tried to cancel the contract, he discovered that there is no cooling off period for commercial contracts and a verbal agreement made over the phone is legally binding. As he could not prove that the original rep had misled him, BizzEnergy could see no reason to cancel.

On contacting the energy consumer watchdog, Energywatch, Dug was in for another unpleasant surprise. Energy regulations do not cover the activities of third party intermediaries. As the original pitch to Dug was from an energy broker, Energywatch had no interest in getting involved.

After a very frustrating year, Dug gave up and decided to pay the £1400 termination penalty to get out of the contract. He is glad to put the incident behind him. “Just seeing the BizzEnergy logo winds me up,” he says.

Unfortunately, Dug’s experience is common. Unlike domestic energy users, small businesses have no protection from unscrupulous selling tactics, and no way to resolve disputes without going to court.

Energywatch and the Federation of Small Businesses are jointly campaigning for more protection for small businesses under the banner “Make the Connection.” Their website gives the following advice for dealing with energy sales:

• Be very careful what you agree to over the phone
• Try to be proactive in choosing your supplier
• Take all the details of the salesperson

A wiser but poorer Dug agrees, “Get things in writing,” he says. “Don’t agree to anything over the phone.”

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