The energy industry can be confusing at best, verging on sharp practice at worst. This blog looks at 3 common traps, and how to avoid them: What is a Letter of Authority, and which LOAs should you not consider signing? Why shouldn’t you agree any verbal contracts over the phone? Why should you ask if your broker has preferential relationships with suppliers? Read on and arm yourself against potential pitfalls.
Signing an LOA
A Letter of Authority is a document signed by a business, which gives a brokerage the authority to perform certain administrative tasks on your behalf. The only tasks they should have authority to undertake are-
- Data collection about your site/s and meter/s.
- Find a better deal for your energy rates.
- Liaise with suppliers to make billing queries.
- Make arrangements for you to renew or switch energy contracts.
- Terminate your existing contract.
It is important to note that a broker should never have the authority to sign a contract on your behalf. Never sign a LOA that gives your broker the authority to terminate a contract and sign a new contract.
This way, you can relinquish the burden of contract negotiations, without losing full control and final say over your next energy contract...read more