How Energy Brokers Were Earning Hidden Commissions at Your Expense
An energy broker — sometimes called a Third Party Intermediary (TPI) or energy consultant — is a company or individual that arranges business energy contracts on your behalf. On the surface, the arrangement appears straightforward: the broker negotiates with suppliers and presents you with what they say is the best deal available.
What many businesses were not told is that the broker was simultaneously receiving a commission from the energy supplier — funded by building a margin into the unit rate charged to your business. The higher the rate, the more the broker earned. The lower the rate, the less they earned. In many cases, brokers had complete discretion over where to set the rate, creating a direct financial incentive to charge you more.
This arrangement was rarely disclosed clearly. Some brokers included vague references to "remuneration" in their terms of business. Others said nothing at all. In neither case did businesses typically receive the clear, written disclosure that the law requires — disclosure that would have allowed them to give (or withhold) informed consent.
The result is that for the duration of many business energy contracts, customers were paying inflated rates — not because the market was expensive, but because a broker was taking a cut that was never discussed or agreed.
"The broker's duty was to act in the interests of the customer. Receiving undisclosed commission from the very supplier whose contract they recommended represents a fundamental conflict of interest." — County Court judgment, 2022
How commission flowed
Commission rates typically ranged from 0.2p to 3p per kWh — amounting to thousands of pounds annually for average SME energy users.
