Utility brokers ‘should be regulated’

Utility brokers should be regulated, either by the Financial Conduct Authority or by regulators Ofgem and Ofwat, to protect customers from ‘Flash Harry’ business tactics.

Peter Sceats, founder and director of water broker The Grand Union Water Company, has insisted that energy brokers “should be and should have been” regulated by either the Financial Conduct Authority or Ofgem.

“At the moment, they aren’t,” he told Utility Week. “This has encouraged some of the most dreadful customer service I’ve ever seen. I call them ‘Flash Harry’ business tactics, and they are at play in the energy market every single day.” Sceats also works as an electricity and gas expert witness, and said he has observed first-hand such tactics at play.

Grand Union Water has said it hopes to “keep such tactics out of the water market” and has, as such, co-founded the water procurement advisor code of conduct – a six-point voluntary code that brokers can sign up to.

Inenco chief commercial officer Dave Cockshott told Utility Week he is “more than happy” with a voluntary code of conduct for brokers. However, he added: “The trouble is that many of the codes of conduct end up being rather lame and, therefore, why wouldn’t you sign up to them?

“If you’re going to have a code of conduct it needs to have meaning and bite and make people nervous about signing up to it, that is when I think there is value in them. There’s no point having a voluntary code that just says: ‘I’ll be nice to you’.”

In 2014, Ofgem proposed regulating the energy sector’s non-domestic third-party intermediaries (TPIs) through a mandatory code of conduct, partially overseen by the regulator.

However, plans were shelved in 2015, as Ofgem said it would wait for the Competition and Markets Authority to report its findings on the energy sector probe, which were published in June 2016.