Energy customers could reportedly receive payouts worth billions after a small business won a landmark legal case over hidden fees in bills.
Hundreds of thousands of “micro-businesses” could now seek compensation over energy deal broker fees hidden within their bills. Micro-businesses are firms with a turnover of less than £1.8 million.
The industry regulator Ofgem raised the cap on gas and electricity prices by five per cent in January. The annual dual fuel bill for the average household rose by £94, leaving more families struggling.
Why could energy customers receive a payout?
The i newspaper reported that Queenie’s Casino Slots, based in County Durham, has recouped £14,000 from French firm Engie after a judge ruled an energy broker hid additional fees in the business’s bills.
The judge found “it was Engie’s policy to not reveal the size or nature of this commission”.
Andrew Smith, the owner of Queenie’s Casino Slots, told the i: “We are pleased to have won damages against the supplier. It may not seem like a huge amount but for a small business like ours it makes a big difference.
“Like many others, we are trying to operate in challenging economic circumstances. Energy bills are big enough as it is without having to fork out more. Many other businesses may have fallen foul to this type of practice costing them thousands of pounds in the process – money they can’t afford.
“No business wants to be ripped off. Check your energy bill or get support. It’s important to make sure you are not overpaying through hidden fees.” Victoria Myers, a lawyer at Energy Solicitors, said: “This has the potential to be the next PPI scandal with thousands of innocent business owners being misled and mis-sold contracts."
The ruling at Leeds County Court could be the start of a scandal potentially bigger than the mis-selling of PPI (payment protection insurance) from 1990 to 2010, legal and energy experts say.
Who could be eligible?
Hundreds of thousands of business owners could be eligible to claim money against their energy providers.
How much could customers get?
The law firm Harcus Parker says fees added to energy bills to pay broker commissions are typically about 1.7p per unit of energy, often costing around 10p per unit.
Harcus Parker claims that broker fees typically add about 10 per cent to the total energy bill for small businesses using a broker service.
