Energy LoA

Letter of Authority

A Letter of Authority (LoA) is a document you sign, giving the broker your permission to obtain data from your supplier. It is required under Data Protection laws. Without it, your current supplier will not provide the information needed to tender your supply. In providing the LoA, you are enabling the energy broker to access information from your existing suppliers including: consumption data, contract end dates and contract prices.

Without an LoA, an energy broker will not be able to obtain details of your current annual consumption or other contract information, such as contract end date (CED), from your existing supplier. This means they will not be able to provide you with accurate prices. If they tell you otherwise, they are wrong. Perhaps more importantly, incorrect information can lead to delayed start dates or even failed contracts, which is costly to you, the customer.

LoA’s should be clear and simple, and should not include any words or phrases that give you cause for concern when instructing a broker to review or manage your energy supply.

It never ceases to amaze us, how often organisations are taken advantage of by unscrupulous brokers. Brokers, whose LoA’s are deliberately worded so as to demand exclusivity, and/or allowing them to enter into contracts on the customers behalf. This is poor practice.

Our LoA expressly states that we cannot enter into contracts on your behalf, nor does it specify exclusivity.

All LoA’s should include a similar statement, and under no circumstances should you sign a LoA that gives your energy broker the authority to sign anything or enter into any agreements with other third parties on your behalf. Ethical brokers don’t take decisions that impact your business. They only take decisions that impact their own.

If you sign an exclusive LoA then other brokers will not be able to compete for your business throughout the validity period of the LoA. This means that you could end up paying higher prices than you need to as you cannot benchmark the prices they are providing. Good energy brokers don’t need exclusivity as they aren’t afraid of competition.

If you are presented with a letter that asks you to allow this do not sign the LoA under any circumstances. It is also advisable to contact the company that presented you with the agreement in writing stating that under no circumstances will you sign the letter.

Unfortunately, there are still some rogue companies in the energy market – much as any other – that attempt to lock customers into 3 year (or longer) agreements that earn both the energy suppliers and the energy broker significantly inflated sums.

If you have been sent any agreement documents that you feel uncomfortable with, please get in touch for some free advice on the legality and obligations of the agreement.