Reporting in Read the small print

Phil Orford

Chief executive, Forum of Private Business

Saving money on utilities should be the mantra of every small bakery emerging from the worst recession for several generations. That means shopping around for the best deals but, as I know myself having run several businesses, most busy bakers simply do not have the time to carry out extensive searches themselves.

Further, many owner managers are mis-sold contracts by utilities companies, which often tie them into ’roll-over’ arrangements with little or no warning, leaving them with inflated bills.

The fact that, from January 2011, roll-over contracts will be limited to one year for micro-businesses will be little comfort for those with more than 10 staff, which will not be protected by the change.

I have also learned that some energy companies regularly impose back-dated bills on small businesses, often for tens of thousands of pounds, following meter errors and other mistakes that are not the fault of the commercial customer.

My organisation, the Forum of Private Business, has joined forces with the Utilities Intermediaries Association (UIA), which has a code of practice for brokers and runs a redress scheme. Unfortunately, not all of them enlist.

Concerned that Ofgem has little power to prevent mis-selling via verbal contracts, in particular, both organisations are calling for the practice to be banned. The protection for small firms is being eroded further with the scrapping of the watchdog Consumer Focus, which oversaw commercial utilities complaints.

The best advice is to be proactive wherever possible and take advice before agreeing to verbal contracts. Above all, read the small print and be aware of key dates in order to cancel costly deals before it is too late.