Rogue Brokers are the Next PPI
Not so long ago we had PPI claims where nearly everyone was owed something. It seems to have come full circle with energy costs and mis-selling in the frame, as Energy companies and rogue brokers are being scrutinised for their hidden charges. The TPI market will soon be regulated and this means we may see a lot of companies being investigated.
So how do you know if a company is mis-selling?
The definition of mis-selling is: the deliberate, reckless or negligent sale of products or services in circumstances where the contract is either misrepresented, or the product/service is unsuitable for the customer's needs. For example, selling life insurance to someone with no dependents is regarded as mis-selling.
After speaking with a PPI Claims company who advised me they were regulated by the Ministry of Justice, they would charge 25% of any rebate found and would just require an authorisation form to get past the data protection act. From just one telephone discussion I have found it is a piece of cake to get someone to pursue your claim for you.
Therefore, if all it takes for these PPI companies to provide a rebate to consumers is an authorisation form and regulation from legal bodies such as the MOJ (Ministry of Justice) and FSA (Financial Services Authority). Surely this could happen for the energy industry as well?
The question now is how does this all apply to the energy industry?
Anything can be mis-sold and that even includes renewable energy products. Below is a video from Which, which explain how they have been mis-sold.
The industry is currently split in terms of regulation. On one hand the energy companies and suppliers are regulated by Ofgem, who can take affirmative action against any wrong doings by these corporations. However, the TPI (Third Party Intermediaries) market has no such enforcement.
Ofgem has announced that a TPI code of conduct will be introduced into the TPI market, to ensure that customers are treated fairly. This will mean that all brokers will have to apply for accreditation. If they are rejected they will not regulated by Ofgem. Brokers who have been accredited and break the code of conduct will face hefty fines. It was previously mentioned that hidden charges could become the new PPI. Therefore, when the code of conduct is enforced there will be no reason why business shouldn’t be able to recoup the cost of hidden charges from rogue brokers. This will no doubt build confidence within the market.
TPI’s have had to battle against a lack of trust within the industry, but with this new code of conduct we expect to see revived faith in the middle man. TPIs will be held to account and this means that customers should feel safer when using a broker/consultant.
However, until the code of conduct is finalised and enforced, we cannot predict the full extent to which it will affect the industry and customer confidence. CUB is proud of the fact that we alreadydisclose all costs and fees to every customer to ensure the utmost honesty and transparency. We are a long way down the road of preparing for the regulation enforcement by making sure we meet all the requirements of Ofgem’s codes of conduct months before it is even introduced.