Millions of businesses and community organisations are potentially entitled to compensation from UK energy giants, a campaigning solicitor said today.
Ryan Dunleavy said secret commissions were paid to third-party brokers who inflated bills.
Mr Dunleavy from law firm Harcus Parker, said in some cases bills could have been inflated by as much as 50 per-cent, and the practice could have happened for up to 20 years.
Ryan Dunleavy speaking to GB News
GB News
Speaking exclusively to GB News, Mr Dunleavy said on Sunday: “We've discovered energy suppliers are giving kickbacks to energy brokers who are supposed to be representing their clients who are non domestic consumers.
“So companies, schools, faith groups, you name it, pretty much anyone who's not a household or a business under 10 staff members could be impacted. So it's absolutely massive.
“There are 1600 brokers in the country. We're not saying that they've all done this, but it seems to be endemic. So it's a massive case.
“We caught wind of it because of doing investigations ourselves. I mean, some of that's fairly sensitive, so I can't go into details but it’s fair to say some clients won't realise because it's simply not on their invoices from their suppliers, and they don't realise quite how much it is. They simply don't know how much they have been could be losing.”
Discussing the amount that unknowing businesses and customers could be losing, Dunleavy added: “It depends on the size of the business and how much electricity it consumes. But some reach up to a million pounds.
“So it depends on the particular consumer. We've got for instance, a brewery that consumed an awful lot of electricity and used a broker to get his contract and it's certainly claimed for hundreds of thousands of pounds.”
Harcus Parker is leading the legal action against energy companies as a group litigation case gets underway to reclaim the undisclosed commissions paid by suppliers to brokers without customers’ knowledge.
The firm last week began sending letters before action to energy companies as the first step in group litigation to reclaim the undisclosed commissions paid by suppliers to brokers without customers’ knowledge.
Ryan Dunleavy speaking to GB News
GB News
Energy suppliers are accused of offering these payments to incentivise brokers to sign up customers with little concern for the fact it helped increase customers' bills.
Small- and medium-sized businesses including high street shops, schools, faith groups, charities, sports groups, care homes, local authorities and other community organisations are all said to have been targeted by unscrupulous brokers.
Research conducted by Harcus Parker found that one energy supplier offered brokers as much as 10p/kWh in commissions that were frequently undisclosed to the customer. A large number of other suppliers offered secret commissions of between 1p - 3p/kWh.
The litigation is being launched as the Government drastically scales back subsidies given to millions of struggling businesses and community organisations under the Energy Bill Relief Scheme.
From April, most non-domestic energy customers will receive a subsidy of just 2p/kWh. There is a concern that many businesses will have to close their doors when this lower level of subsidy is introduced.
Highlighting what regulation could do in this area to ensure the situation isn’t repeated, Mr Dunleavy explained: “Well, they can impose sanctions, they can fine, they can investigate.
“So they should definitely investigate the situation and then impose regulations that have to be followed.”