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News

Letter of Authority: Don’t Sign Your Business Away to a Broker

From privacy policies to credit card agreements, every transaction requires a long and boring legal agreement these days. When presented with one of these documents, particularly one that does not seem all that important, the temptation is sometimes to scan the text before hastily adding a signature. A Letter of Authority (LOA) is a legal document which gives your energy broker permission to do certain things. It is usually signed early in the process and means that a broker can get things like consumption data and invoices from an energy supplier. Energy suppliers will not deal with a broker if they don’t have an LOA, so it’s important you sign the letter early if you want the partnership between you and your energy broker to run smoothly. Just make sure you read it thoroughly first. As well as asking for permission to access basic information, some untrustworthy brokers will also ask for permission to agree a contract on your behalf in the LOA. If signed, this means that the broker can sign you up to any deal they choose – especially deals that include a large commission kickback to the broker. In short, it could mean you pay way over the odds for your energy supply across the length of your contract.

Avoiding bad apples

Any company can set up as an energy broker and the market is not under any strict regulation. Unfortunately, this has attracted many unscrupulous operators to the industry. One of our most recent blog posts gives you ten tips to help spot a dodgy energy broker. Using a dodgy LOA which asks for too many permissions could be added to this list and you should never give an energy broker permission to agree your contract for you. At Utility Helpline, we only ever ask clients for basic permissions that allow us to do our job. We use this permission to speak to compare more than 70 tariffs from 20 different suppliers and report the results back to our customers. We will offer advice on the tariff that we think is best and provide a detailed explanation why, but the final choice is always left up to the client.

Why you should use a broker

You might have heard some of the horror stories from businesses getting stuck with a dodgy third-party intermediary. This might put you off using a broker for good, but there are some important ways that brokers can benefit your business.

Save time and money

Brokers compare prices in line with your specific business needs. They visit dozens of gas and electricity suppliers on your behalf, finding the very best deals.

Expertise

Energy brokers are market experts. You can benefit from an impartial understanding of the industry, particularly how it relates to your business needs.

Monitoring

The best energy deals are on a fixed-term basis. A good energy broker will stay in touch over the course of your contract and work more closely with you when its time to find a new deal.  


Published by Utility Helpline on (modified )