As businesses, we've all been the subject of a scam call (or two); however, the business energy industry is rife with scammers trying to get businesses to sign up for suspect contracts.

So we've put together 'The Red Flag Report', our 5-point guide to what to watch out for if someone calls claiming to be your energy company or energy broker.

🚩 "Your contract has been prematurely cancelled."

The newest of the scams that we've come across is when the scammer explains to you that your "contract has been prematurely cancelled", only to then go on to offer a new contract with an immediate start date, and sometimes with a different supplier.

The reality is that your contract will almost certainly never be brought to an end prematurely.

The likelihood is this scammer will just be looking to sign you into an additional long-term contract to gain a high commission payment.

You can swipe left on this scammer!

🚩 "We're your existing supplier/broker."

Another common opening from a scammer is that they will tell you that they already have an existing relationship with you, either as your existing supplier or broker who set up the contract.

This is purely to try gathering information such as your renewal date, MPAN, usage, etc.
The likelihood is that this caller is a scammer or broker using underhand tactics in order to sell you a new contract.

Ask them for proof of the agreement or contract, and see what they say.

If you are unsure, hang up the phone and get in touch with your existing supplier or broker directly.

You can swipe left on this catfish, too.

🚩 “Your contract is due for renewal.”

A classic way to make a cold call sound like an account-management call.

They'll most likely tell you that the renewal is due immediately or in the coming days, too.

And the best way to reply to this question. Ask them, “What is my exact contract end date?”

If they don't know it, that tells you everything.

It's definitely a 'hard swerve' on this caller.

🚩 “If you can just sign this LOA, we'll get you some prices.”

The term 'LOA' stands for Letter of Authority, and is usually perfectly legitimate in the business energy world.

The problem is that there are two types. A 'Soft' LOA and a 'Hard' LOA.

Soft LOAs allow honest brokers, like us, to source prices and gather information, but don't allow them to enter into or sign you into a new contract.

A Hard LOA does.

Beware of any callers who try to get you to sign a Hard LOA, and check any paperwork to ensure that brokers don't have this power, because scammers and underhand brokers will take advantage and sign you into contracts with high prices and high commission payments to them.

Swipe right for the honest callers, and left for the scammers.

🚩 “You don't pay a penny. The supplier pays our commission”

Technically, the supplier may transfer the money to the broker - but the cost is ultimately incorporated into what you pay your supplier, via a term called 'uplift'.

An uplift is basically how a broker gets paid.

Instead of sending you a bill for their service, many brokers add a small margin to the price of the energy they’re offering you. That extra bit, the uplift, is their commission.

For example, if the actual energy price is 10 pence per kWh, a broker might add half a penny. So you’d be paying 10.5 pence per kWh without necessarily seeing a separate "broker fee" on your bill.

The energy supplier pays the broker their share behind the scenes.

It may not sound like a lot, but if you're consuming hundreds of thousands of kWh of energy, and a broker adds in 5p without telling you upfront...

Let's see how much they would make on setting up a 5-year contract for you.

5p/kWh × 200,000 kWh × 5 years = £50,000.

An honest broker, like us, will always clarify their uplift upfront and provide an ongoing service to you throughout the lifetime of the contract.

Scammers or underhand brokers will take the money and run.

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And that wraps up 'The Red Flag Report'.

If we want you to take away one thing from the report, it would be to end any call that you think sounds suspicious, and contact either your energy company or broker directly using trusted contact numbers that you have for them.

We've seen first-hand how many businesses can be badly affected by scammers and underhand brokers in this industry, and we do our best to help businesses avoid the pitfalls.

If you want an honest assessment when it comes to your business energy from a company that is rated 4.9 on Trustpilot, get in touch with us today.

Call us on 0191 7208 238, or request a callback on our website.