The Energy Advice Line, who compare business energy prices, has cautiously welcomed the introduction of a Code of Practice for energy third parties, in order to stamp out misbehaviour by rogue brokers.
But Julian Morgan, managing director of the price comparison and advice service for domestic and business energy customers, said it was crucial that the Code outlaw the practice of cold calling and other unscrupulous sales tactics. "OFGEM's decision to clamp down on rogue energy brokers is long overdue, but better late than never," Mr Morgan said.
"Business energy customers have long suffered from the unscrupulous behaviour of some brokers who use questionable tactics such as cold calling and high-pressure selling techniques to force or trick them into poor energy deals. A Code of Practice is very welcome, but the devil will be in its detail. Businesses will only benefit if the Code is robust and properly policed and enforced."
OFGEM has released a discussion paper outlining its plans to introduce the Code to bring curtail misbehaviour by TPIs. It will be illegal for suppliers to sell their energy through TPIs that are not accredited as compliant with the Code. The regulator is working on a draft Code that sets out the standards that TPIs should meet when dealing with business consumers, including "professional and honest behaviour, transparency of information, and effective monitoring." Under the proposal, an independent board comprising industry representatives and consumer groups will govern the Code. The board will measure and police compliance, with OFGEM retaining the power to veto board decisions.
Mr Morgan welcomed OFGEM's acknowledgement that reputable TPIs can "enhance consumer experience and help create competitive pressure in the market".
"But sadly, some rogue brokers have been engaging in unscrupulous sales activity that has cost many businesses considerable amounts of money," Mr Morgan said. "Cold calling, high pressure selling techniques and good old lying have been the calling cards of some of these unscrupulous players and we have long been calling for their bad practices to be stopped."
"Behaviour that would never been tolerated in the domestic energy sector has been allowed to flourish in the business energy sector in the hope that the market will sort itself out. It hasn't happened. If the Code outlaws bad practice - including cold calling - it will be a blessed relief for UK businesses. We await details of the Code with interest."
The changes to supplier licence arrangements that underpin the Code will be introduced later this year.