Ofgem to get tough on unfair contracts

Energy regulator Ofgem has unveiled proposals to better protect small business customers from unfair contracts.

The proposals, due to be part of a consultation, include extending protections which currently cover microbusinesses to include businesses with up to 50 employees preventing energy companies objecting to businesses who want to change their contracts and introducing new standards of conduct which will be enforceable by Ofgem.

Association of Convenience Stores chief executive James Lowman welcomed the proposals. “Local shops have waited a long time for Ofgem’s plans to extend protections to more businesses and they will welcome the announcement. These proposed changes cannot come into force quickly enough,” he said.

“However, our members and countless other small businesses are still at the mercy of energy companies when it comes to backbilling, and this needs to be addressed urgently. Getting an unexpected bill of several thousand pounds puts the local shops and other small businesses at the heart of the economic recovery at risk of closure.”

The consultation is set to be opened later this month.

British Gas has announced that it will phase in a 12-month backbilling limit for micro-businesses. It will adopt the policy over the next three years and will initially bill customers for three years, lowering to two in 2013 and then 12 months in 2014.

British Gas Business managing director Kanat Emiroglu said the supplier wanted to help its business customers to thrive. “I understand the concern and frustration that billing inaccuracies can cause our customers,” he said.

“It is particularly important now, when small and medium-sized businesses are the growth engine of the economy, that we ensure our customers get accurate bills and pay only for what they use.”