Accidentally signed up to 2 business electricity contracts - Help!

shopaholic1

Wondering if anyone can give any advice. I signed up to an electricity supply contract last August 2021 to start the supply this August 2022 through an Energy broker. They got the start dates mixed up with our new and current suppliers which led to a whole load of hassle and our current suppliers kept send letters of refusal. I tried to resolve this but heard nothing back. Foolishly (now) I assumed that the contract hadn't gone ahead and had been cancelled. In February this year, we were approached by another broker offering their services. I explained the circumstances of what had happened previously and the new broker said that they could check for me if there was a letter of authority in place for our company with any suppliers. Apparently he checked and told me there was nothing and that we were free to continue with instructing them to act on our behalf, which I did. They signed us up to what was a reasonable contract with another electricity supplier. Now it turns out we are actually signed up for two contracts to go ahead and start in August this year. I have tried contacting the second broker and Energy supplier but both are adamant that they will not cancel and that we will be liable for both the energy costs and broker commission on the contract which will be £5,500 alone.

I am waiting for transcripts of the telephone conversations, but does anybody have any advice of how I can cancel this contract as I feel we were mis-sold, surely these brokers have a duty of care to their customers!

QrizB

shopaholic1 said:

I am waiting for transcripts of the telephone conversations, but does anybody have any advice of how I can cancel this contract as I feel we were mis-sold, surely these brokers have a duty of care to their customers!

No, energy brokers have no duty of care to business customers. Businesses are considered to know what they're doing and don't get the same protections that consumers do.

I suspect your best bet will be to pay the £5k to buy out the most expensive contract and chalk it up to experience.

Ustone

Hi, I’m a tiny micro business and have a similar problem mine would all have been resolved if there had been a cooling off period of 14 days.  I’ve got my MP involved and she’s written to the Secretary of State for business urging them to introduce something.   Don’t give up.

MWT

Not much help I know, but there is a package of reforms coming in from October this year...

https://www.ofgem.gov.uk/sites/default/files/2022-03/Decision Microbusiness Strategic Review.pdf

Still no cooling-off period though...

Atomicsnail

There used to be the trick of telling them you have sold the business and the new "owners" are then not responsible for the contract

MWT

Atomicsnail said:

There used to be the trick of telling them you have sold the business and the new "owners" are then not responsible for the contract

... and that would be fraud of course...

Atomicsnail

MWT said:

Atomicsnail said:

There used to be the trick of telling them you have sold the business and the new "owners" are then not responsible for the contract

... and that would be fraud of course...

Change business name ? So contract is void ? 

I don't see how paying for electricity twice can be legal. 

MWT

Atomicsnail said:

MWT said:

Atomicsnail said:

There used to be the trick of telling them you have sold the business and the new "owners" are then not responsible for the contract

... and that would be fraud of course...

Change business name ? So contract is void ? 

I don't see how paying for electricity twice can be legal. 

Changing a business name does not void a contract.

These are business contracts, they are held to a different standard.

If you enter into two contracts for energy then you are going to be paying for the energy on one and the extortionate cancellation penalties on the other

Yes it is deeply frustrating and expensive, but in business you can never take your eye off the ball and 'assuming' a contract you signed has somehow just ceased to exist is deeply unwise.

Ectophile

Atomicsnail said:

MWT said:

Atomicsnail said:

There used to be the trick of telling them you have sold the business and the new "owners" are then not responsible for the contract

... and that would be fraud of course...

Change business name ? So contract is void ? 

I don't see how paying for electricity twice can be legal. 

How would renaming the business void all contracts?  It would be like me changing my name, and then saying I don't have to pay my credit card bills any more.

You would have to wind up the company, and start a new one.  With all the consequences from that.

Vickmyster

I've just had this issue with my British Gas contract. I was in a contract until March 2024. I had a cold call to sign up with a broker (still through British Gas) in March 2022. I signed up to lock in a good rate. I was contacted by this broker to inform me they had gone into Administration in Feb 2023. In March 2023 I was then contacted by my existing broker informing me my contract was ending in March 2024, and to sign up with them. I did so, naively assuming that because the broker I'd previously signed with in 2022 had gone into administration, thinking my renewal dates had gone 'back on the market'. I didn't want to leave it until the last minute to get a new contract, so I signed up.
My contract renewal date came, and I then received a letter from a resolution company stating I owed £1477.90 + VAT
for breach of contract. If I'd given a LOA to the first broker company and was signed into a contract with them, how was the second broker company able to sign me up with their company? I asked this question to the resolution company and they stated that I wasn't signed into my contract until the date it became live! If this is the case, how come I'm not allowed to come out of that contract? Why wasn't I provided with confirmation that the first brokers contract would still be upheld, even though they had gone into administration, and also why, if the second company sent in a LOA, weren't they alerted, that a contract was already in place and I should have been alerted that a contract was in place and I'd be in breach if I signed up with this second broker. Something isn't right here, and needs investigating!
Do I have any leg to stand on, or do I need to pay the £1,477.90 + VAT ( Commission lost, apparently)?? 

Ectophile

Vickmyster said:

I've just had this issue with my British Gas contract. I was in a contract until March 2024. I had a cold call to sign up with a broker (still through British Gas) in March 2022. I signed up to lock in a good rate. I was contacted by this broker to inform me they had gone into Administration in Feb 2023. In March 2023 I was then contacted by my existing broker informing me my contract was ending in March 2024, and to sign up with them. I did so, naively assuming that because the broker I'd previously signed with in 2022 had gone into administration, thinking my renewal dates had gone 'back on the market'. I didn't want to leave it until the last minute to get a new contract, so I signed up.
My contract renewal date came, and I then received a letter from a resolution company stating I owed £1477.90 + VAT
for breach of contract. If I'd given a LOA to the first broker company and was signed into a contract with them, how was the second broker company able to sign me up with their company? I asked this question to the resolution company and they stated that I wasn't signed into my contract until the date it became live! If this is the case, how come I'm not allowed to come out of that contract? Why wasn't I provided with confirmation that the first brokers contract would still be upheld, even though they had gone into administration, and also why, if the second company sent in a LOA, weren't they alerted, that a contract was already in place and I should have been alerted that a contract was in place and I'd be in breach if I signed up with this second broker. Something isn't right here, and needs investigating!
Do I have any leg to stand on, or do I need to pay the £1,477.90 + VAT ( Commission lost, apparently)?? 

I think you made too many assumptions that other people would check things for you, when it's in their interests not to check.

The broker that went into administration would have signed you up to a new contract in advance, before they went bust.

You then went to another broker and got them to sign you up for a contract without checking what your status was.