Business energy mis-selling occurs when a supplier or broker makes false representations about contract terms, conceals commission, rolls a customer into a worse contract without proper notice, or uses high-pressure sales to push an unsuitable contract length. The legal bases for claims include contract law misrepresentation, Ofgem licence breaches, and the Consumer Rights Act for sole traders. Recovery routes depend on business size.
Last reviewed: 12 May 2026
What Mis-Selling Looks Like in Business Energy
Business energy is sold through two channels: directly by suppliers and through third-party intermediaries (TPIs), commonly called energy brokers or consultants. Mis-selling can occur in either channel but is disproportionately concentrated in the broker market, where regulatory oversight has historically been weaker than in direct supply.
Ofgem has published enforcement decisions against suppliers for failures in their management of broker relationships, and the business energy broker sector has been the subject of ongoing regulatory scrutiny. The patterns of mis-selling are well-documented through Ombudsman decisions, court cases, and Ofgem's published enforcement register.
Understanding whether your situation fits one of the recognised patterns is the first step in assessing whether a claim is viable.
Common Patterns of Mis-Selling
Pattern 1: Undisclosed broker commission A broker arranges a business energy contract and receives a commission from the supplier, embedded in the unit rate paid by the business. The business is not told that the broker is being paid by the supplier, creating a conflict of interest. The broker has an incentive to recommend the contract with the highest commission rather than the lowest unit rate.
Ofgem's Standard Licence Conditions require suppliers to ensure that TPIs acting on behalf of the supplier disclose the basis of their remuneration to business customers. Where this disclosure was not made, the customer may have a claim against both the broker and the supplier. Court decisions have found in favour of businesses where undisclosed commission resulted in a materially higher unit rate than would otherwise have applied.
Pattern 2: False or misleading claims about contract terms A broker or supplier sales representative makes verbal representations about the contract that are contradicted by the written terms. Common examples include claiming the contract is cancellable with a short notice period when the written contract has a different provision, misrepresenting the length of the fixed-price period, or claiming a unit rate is fixed when it is subject to a pass-through mechanism.
Under the Misrepresentation Act 1967 and general contract law, a contract entered into on the basis of a material false statement can be rescinded or the injured party can claim damages. The burden is on the claimant to evidence what was said and that they relied on it.
Pattern 3: Rollover into worse terms without adequate notice Many business energy contracts contain automatic renewal clauses that roll the customer into a new contract at the end of the fixed term. Ofgem's licence conditions require suppliers to notify microbusiness customers of the approaching renewal date within a defined window and to give adequate opportunity to negotiate or switch.
Where a customer was rolled into a new contract at significantly worse rates because the renewal notice was inadequate or not received, and the contract terms make exit prohibitively expensive, this can constitute a mis-selling or unfair contract terms complaint.
Pattern 4: Unsuitable contract length sold under pressure A broker or supplier sales representative pushes a business to sign a five-year contract, using time pressure, misleading statements about price increases, or claims that the rate will not be available after a deadline. The business signs a long-term contract that exposes it to significant exit fees if circumstances change.
Ofgem has expressed concern about the use of pressure selling tactics in the business energy market and has included requirements on supplier management of TPI conduct in its licence conditions. For sole traders and small partnerships, the Consumer Rights Act 2015 provides additional protection against unfair terms in contracts.
The Legal Basis for Claims
Contract law misrepresentation A contract is voidable if it was induced by a material misrepresentation. Under the Misrepresentation Act 1967, a claimant can seek rescission of the contract and damages. The representation must have been a statement of fact (not opinion), made by the other party or their agent, and relied upon by the claimant in entering the contract.
Ofgem licence breaches Ofgem's Standard Licence Conditions impose obligations on suppliers in relation to TPI conduct, commission disclosure, renewal notifications, and complaints handling. A breach of a licence condition does not automatically create a right of action for a private party, but it is relevant evidence in Ombudsman complaints and can support a claim that the supplier failed its regulatory obligations.
Consumer Rights Act 2015 The Consumer Rights Act applies to contracts between a trader and a consumer. For business energy, this means it applies to sole traders acting outside their main area of business expertise. Where a sole trader was sold a business energy contract through unfair terms or misleading practices, the Act provides additional remedies including the right to a price reduction or rescission.
The Business Protection from Misleading Marketing Regulations 2008 These regulations prohibit misleading advertising and marketing practices directed at businesses. False claims about contract terms, unit rates, or broker independence that appear in marketing materials may breach these regulations. Enforcement is primarily by Trading Standards rather than through private action, but documented breaches support Ombudsman and civil claims.
How to Build a Claim File
The strength of a mis-selling claim depends almost entirely on the quality of the evidence. Before raising a complaint or claim, assemble the following:
The original contract and any pre-contract documents: The signed agreement, any terms and conditions provided at signing, and the energy quote or proposal document. Compare the unit rate quoted against the unit rate billed to identify any commission uplift.
Records of verbal representations: Notes made at the time of the sales conversation, any follow-up emails, and any recorded calls if you requested call recording. If the broker or supplier made representations by email, preserve those emails.
The billing history: Invoices across the contract period, showing the unit rate applied and how it compares to the market at equivalent times using DESNZ published data.
Renewal correspondence: Letters or emails regarding the approaching renewal date and the terms of the new contract. The date of the first renewal notification is critical if the claim involves rollover without adequate notice.
Comparative quotes: Evidence of what the market rate was at the time of signing, obtained through the same or equivalent brokers, to demonstrate the commission uplift embedded in the contract.
Recovery Routes by Business Size
Microbusiness customers: The primary route is the Energy Ombudsman once the internal supplier complaint reaches deadlock. The Ombudsman can direct refunds of commission uplift, rescission of rollover contracts, and goodwill payments. For disputes involving broker mis-selling specifically, the complaint must be raised against the supplier (who is responsible for their TPIs' conduct) rather than the broker directly, as the Ombudsman scheme covers licensed suppliers not unregulated brokers.
Sole traders: Can also access the Consumer Rights Act remedies and may be able to claim through the small claims court for amounts up to £10,000. The combination of Ombudsman and small claims routes provides two independent paths.
Larger businesses: Ombudsman access is not available. Civil litigation is the primary route for larger claims. For sums above £10,000, instruct a solicitor with energy or commercial contract experience. Some law firms take business energy mis-selling cases on a conditional fee arrangement where the facts are strong.
Ofgem enforcement: Where mis-selling is systemic across a supplier's TPI network, Ofgem may investigate and take enforcement action, resulting in fines and remediation programmes. Individual businesses can report suspected systemic mis-selling to Ofgem's enforcement team, but this is not a recovery route for individual claims.
Frequently asked questions
Editorial disclaimer: This information is provided for general guidance only and does not constitute legal advice. For claims involving significant sums or complex contractual disputes, obtain independent legal advice before proceeding.
What is undisclosed broker commission in energy contracts?
Undisclosed broker commission is the payment made by a supplier to a broker for arranging a business energy contract, embedded in the unit rate without the business customer's knowledge. Where the commission was not disclosed and it materially affected the rate paid, there may be grounds for a claim against the supplier and the broker.
Can I exit a business energy contract I was mis-sold?
If the contract was induced by a material misrepresentation, it may be voidable under the Misrepresentation Act 1967. In practice, suppliers rarely agree to rescission without an Ombudsman determination or court order. The more common outcome is a financial remedy rather than full contract rescission.
Does the Consumer Rights Act protect limited companies against mis-selling?
No. The Consumer Rights Act applies to consumers, defined as individuals acting outside their business activities, and to sole traders in limited circumstances. Limited companies must rely on general contract law and Ofgem licence condition breaches rather than the Consumer Rights Act.
How does the Ombudsman handle broker mis-selling complaints?
The Ombudsman's jurisdiction covers licensed energy suppliers. Where a broker acted as the supplier's agent, the Ombudsman can hold the supplier responsible for the broker's conduct. Complaints must be directed at the supplier. The Ombudsman can direct financial remedies but cannot regulate the broker directly.
Are there time limits on making a mis-selling claim?
Under the Limitation Act 1980, civil claims for contract misrepresentation must generally be brought within six years of the date the cause of action arose (the date the contract was signed or the date the misrepresentation was discovered). Ombudsman complaints have no statutory time limit but must follow the internal complaint stage first.
How we verified this
This article draws on published guidance from Ofgem, the Department for Energy Security and Net Zero, and the primary legislation and regulatory sources listed in the Sources section. No aggregator or supplier-produced content was used as a primary source.
