Brokers Beware: When Advice Becomes Liability

Energy brokers spend their working lives helping customers make decisions.

But what happens when the advice given to a customer creates a liability for the broker?

A recent dispute provides a useful reminder of why conversations, advice and contractual processes matter.

“You Can Just Move the Contract”

In this case, a broker advised a customer that they were able to move away from an existing contract.

The customer acted on that advice.

Unfortunately, the position wasn’t as straightforward as had been suggested and the customer subsequently found themselves with a duplicate contractual arrangement.

A complaint followed.

As part of the investigation, the relevant call was reviewed and the evidence supported the finding that the customer had been incorrectly advised.

The result?

A £4,500 liability for the broker.

Your Conversations Are Part of the Evidence

It’s easy to think of a sales conversation as simply that – a conversation.

But when a dispute arises, the evidence surrounding the sale can become extremely important.

Call recordings, Letters of Authority, contractual documentation and correspondence may all form part of establishing what happened.

That means businesses need to think beyond making the initial sale.

They also need robust processes that protect them if the agreement is subsequently challenged.

Prevention Is Better Than Recovery

PreAction’s experience gives us visibility of the problems that repeatedly lead to disputes.

And one of the most valuable things we can do is help brokers identify those risks before they result in financial loss.

That means asking questions such as:

  • Are agents clear about what they can and cannot tell customers?
  • Are calls and documentation retained appropriately?
  • Is the contractual position clearly explained?
  • Are internal processes consistently followed?
  • Could you evidence what happened if a sale were challenged 12 months from now?

Because sometimes the most valuable dispute is the one you prevent from happening.

Protecting the Broker as Well as Recovering Revenue

PreAction is well known for helping brokers recover outstanding commissions and resolve customer disputes.

But our industry experience also gives us an opportunity to help clients understand where those disputes originate.

The more we learn from previous cases, the better equipped businesses are to protect themselves in the future.

If you’d like to talk to PreAction about your dispute processes, contractual risk or an existing customer issue, get in touch with our team.