Last updated on April 13th, 2015 at 02:21 pm

I nearly called this blog “and the cowboys came over the hill” but decided that the actual title would be more use for small businesses in the same situation as a friend of mine.

It seems that new businesses get added to a database somewhere which is then accessible to what can only be called cowboy companies who ring up and try to get you to sign up for cheaper power. While the idea of cheaper power sounds attractive there are some things that you need to be aware of as a new small business.

Each of these companies (who have official sounding names like “Meter Registration Unit”)  will all tell you that they are not brokers and that all the others are “cowboys” while at the same time neglecting to tell you that they only want you to sign up to the power company that they represent. They may also tell you they are part of a government scheme, quote misleading prices, bamboozle you with comments about deemed rates and generally trick the unwary. You may also be told that you have 14 days “cool-off” period where as in actual fact, if you verbally agree to anything with them you are not covered by the Distance Selling Regulations as the transaction is considered to be a B2B one and not a B2C.

The experience of my friend has led me to look into this some more and I have even spoken to Npower (one of those recommended by the brokers) who tell me that they get a lot of business from this system although they know that as it is not regulated there are some shady dealings going on and if you agree to change to them over the phone and then say that you don’t want to move they will refer it to their complaints team.  I have no doubt that other firms also react in the same way and this is in no way any criticism of Npower.

And the best thing is… if you are lucky enough to get on this database you can expect maybe 200+ calls over a couple of days and multiple calls from the same company as happened this week to a small business that I know.  Al I can suggest is that if you manage to get onto the database just tell them that you are not interested, contact your existing power supplier (assuming that you want to stay with the same company) and sign up for a contracted rate.  You can also sign up for the Telephone Preference Service (something I would recommend everyone does, both at work and at home, to try and stop cold calls) and then log the details of any calls received and report them.

If you would like to read up more about these scams then a quick Google search will give any new small business plenty of warning – a couple of  suggested searches are Meter Registration Service  and  energy brokers scam which suggests that this has been going on for several years without any action being taken by the authorities.

Please note that this blog posting isn’t saying that all energy brokers are cowboys, just that there are some out there who prey on new small businesses at a time when they are vunerable to scams (it is a busy time when you have just set up a new business).  Personally, if I wanted to check my energy costs I would probably contact the various suppliers myself and get the details of the best prices but you may feel more comfortable having someone else do this for you (just remember that they will be paid a commission or will charge you a fee for doing this and if they are paid a commission you need to ask them how independent they are and how many utility companies they represent).  There is also hope in this article that says that Ofgem are looking into forcing energy  brokers to admit when they are being paid commission. They may also be compelled to explain key terms and conditions and make it clear that all contracts are legally binding – even those set up over the phone.

And finally, it seems that if you are a small business and complain to the firm you have been tricked into agreeing to move to you can complain to the Energy Ombudsman once you have complained and reached a deadlock with the power company.  This page has more details about this at the bottom of the page