| | 11 Portfolio
39 Code of Practice | |
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| 1.1 Responsibility | | Where the Broker uses a third party, it is the brokers responsibility to make sure that people working on their behalf understands and follow this Code of Practice. | | Any actions of the third party are deemed to be the action and responsibility of the Broker and this is relevant throughout all principles laid out in this Code of Practice. |
| 1.2 Evidence | | The Broker must keep evidence of any third parties they use. They must share them with suppliers, regulators, the Code Manager, the Independent Code Panel and their people, upon request. | | The Broker must issue any third parties they use with unique identifiers that they must share with suppliers and upon request with the regulators, the Code Manager and the Independent Code Panel and their people. | | The Broker must have a robust, continuous screening and selection process in place to determine which third parties they choose to use. |
| 2.1 Hiring | | The Broker must have robust recruitment processes to find people with the skills and professionalism to do their job to the high standards required by this Code of Practice. |
| 2.2 Background Checks | | The Broker must be able to show that for each of their sales people they have: | | * gathered their employment and training history. | | * obtained and checked professional references. | | * obtained and maintain Disclosure and Barring Service (DBS) checks for field based people and identify when appropriate action is required. |
| 3.1 Training | | The Broker must have an effective training programme in place. They must be able to show that all their people have gone through a thorough induction and assessment, before they are allowed to provide services to a customer. | | They must also update their training as regularly as required, in line with the latest changes, for example (but not limited to) in the market, laws or regulations. |
| 3.2 Assessments | | The Broker must assess all their people before they can provide services to customers – and again at least once a year after that. | | The assessment should confirm that the people at least fully understand: | | * all products that the Broker presents to customers. | | * requirements for correctly using Change of Tenancy. | | * how to identify a micro-business. | | * how to recognise and treat vulnerable customers. | | * what they need to do to abide by this Code of Practice and the implications for the Broker and them personally if they breach the provisions of the Code of Practice. | | * what they need to do to comply with the Data Protection Act. | | * what other relevant laws and regulations they need to be aware of (and comply with where applicable – including Ofgems Standards of Conduct and Electricity/Gas Supply Licence condition 7a and 7b). |
| 3.3 Evidence | | The Broker must keep training evidence for each person which show when they have been through regular training and assessments. |
| 4.1 Records | | The Broker must protect a record for each of their people, including their: | | * name and address. | | * date of birth (or adult status). | | * period of employment. | | The Broker should manage their staff records effectively to make each sales contract traceable to an individual representative. | | This evidence must be maintained in line with the Document Retention Policy, to allow customer queries and/or complaints to be fully investigated and resolved, and shared with suppliers, regulators, the Code Manager, Independent Code Panel and their people, upon request. |
| 5.1 Honest, Accurate and Transparent | | The Broker must make sure that any sales materials they use, including web-based sales tools are written in a simple, accurate and transparent way. | | The broker must not use any false or misleading information – or try to hide or gloss over any facts about which the customer should be made aware. |
| 5.2 Quotes | | All quotes provided to the customer must: | | * be based on the most up to date information obtained from the supplier. | | * be based on the most up to date information obtained from the customer (and make this clear to the customer). | | * explain how it is been calculated. | | * include all principal terms as provided by the suppliers. |
| 5.3 Sample Copies | | The broker must share copies of their sales material with regulators, the Code Manager and the Independent Code Panel and their people, upon request. | | The broker must share copies of their sales material about suppliers products with the relevant supplier. |
| 6.1 Identification | | Whenever the Broker talks to a customer, they must: | | * say who they are and who they are working for (give their name and the full business name of the Broker). | | * state the reason they are contacting them. | | * make it clear they work for a separate company, not the supplier. | | * say which suppliers they associate with. |
| 6.2 Nuisance calls and face to face sales | | The broker must respect the customers right to say no. If a customer says it is a bad time or they do not want to talk, the broker should accept this straight away – and not make a return visit and/or call back if the customer asks them not to. |
| 6.3 Contact Details | | The Broker will give the customer full contact details, including a phone number they can call, if they want to get in touch. |
| 6.5 Diversity | | The Broker will treat everyone they talk to with the same courtesy and respect, whatever their background, beliefs or abilities. They wont use sales tactics that make people feel excluded or alienated. |
| 6.6 No pressure | | The Broker will not use high pressure sales tactics to push, force or bully anyone into buying anything. | | The Broker will not exploit a persons inexperience, vulnerability, suggestibility or sense of loyalty to make a sale – and will treat them with sensitivity and respect. |
| 6.7 Honest, Accurate and Transparent | | The broker will use clear, easy-to-understand language. They will not say anything false or misleading to make a sale – or try to hide or gloss over anything. | | All relevant information will be presented to the customer so they can make an informed decision, such as (but not limited to): | | * contract length. | | * all charges applicable to the customer (e.g. standing charge(s) and price per kWh); clearly stating where there are fixed and/or variable elements. | | * principal terms of the contract including (but not limited to) payment method and agreed billing frequency. | | * suppliers will make the customer aware of the supply start date unless agreed in advance via the Broker. | | * next steps for customer, supplier and/or Broker. | | The Broker is responsible for making sure they only present and/or sell to the customer products or services that are right for their business needs and circumstances. | | The Broker will be respectful and fair with other Brokers and suppliers. |
| 6.8 Evidence | | The Broker must keep evidence of every quote they give out and every sale they make for at least 12 months from the first call or visit – or if a contract is agreed, 12 months after the end date (whichever is later). |
| 7.1 Knowledge and Awareness | | As well as this Code of Practice, the Broker must be aware of (and comply with where applicable) other laws and regulations, including (but not limited to): | | * OFGEM Supply Licence Conditions 7a and 7b. | | * Data Protection Act. | | * Business Protection from Misleading Marketing Regulations 2008 (BPMMRs). | | * Employment law. | | and any other laws and regulations that may apply. | | The broker need to have an awareness of supplier obligations under the MRA (Master Registrations Agreement - Electricity) and SPAA (Supply Point Administration Agreement – Gas) for the transfer of energy suppliers. | | The broker must be able to show awareness of legal/regulatory updates relevant to their business and implement changes where and when required. | | The Broker will ensure that their business practices do not cause suppliers to breach any of the relevant laws and regulations. |
| 8.1 Data Handling | | The Broker is responsible for compliance with the General Data Protection Regulation, as far as it applies to collecting and storing peoples data and marketing preferences. | | The Broker must: | | * make sure customers understand that they are allowing the Broker to hold their data and preferences under the Data Protection Act (and ask the customer if they consent to their data and preferences to be shared with the supplier). | | * register as a data controller with the Information Commissioner. | | * agree and sign a Data Processing contract with the supplier. | | * keep customers details secure – and destroy them securely as soon as they are no longer required. | | * collate and process customers Direct Debit details accurately. | | The Broker must have a robust document retention policy in place and are responsible for maintaining this whilst meeting DPA requirements. |
| 8.2 Marketing Consent | | The Broker will screen all customer data (both new and existing customers) against marketing exclusion lists, such as (but not limited to): | | * Telephone Preference Service (TPS). | | * Corporate Telephone Preference Service (CTPS). | | * Mail Preference Service (MPS). | | * Electronic Communications (EC Directive). | | and any other similar services. |
| 9.1 Responsibility | | The Broker is responsible for the correct use of “Change of Tenancy” (CoT) by their people, by: | | * making sure that the customer fully understands what a valid COT is. | | * gathering evidence to determine the COT is genuine. | | * retaining evidence for as long as the acquiring suppliers requires. | | All evidence is to be made available to suppliers upon submission of supply contracts. | | The Broker will not use a COT as a means to release a customer from their supply contract or any other reason than a genuine COT. | | The Broker will provide this to regulators, the Code Manager and/or the Independent Code Panel upon request. |
| 10.1 Transparent, Accurate and Fair | | The Broker is responsible for making sure the customer fully understands that: | | * they are agreeing a legally binding contract with the supplier. | | * the supplier might not accept the contract, if it does not meet their conditions (for example if they fail the credit check). | | * they have to end their current contract and arrange payment of any outstanding balances and/or penalties they owe. | | * the supplier may contact them directly. | | There are 3 forms of supply contracts, verbal, paper and electronic (including web-based). |
| 10.2 Verbal Supply Contracts | | If the customer agrees to the contract by phone. | | * The Broker must present in full, the most up-to-date version of the suppliers verification script to the customer clearly – before the customer agrees to any contract. | | The Broker must keep a complete and unedited recording of this verification on file for at least the length of the contract term. | | They must give a transcript of the recording to the customer upon request. Upon request, they must share the recordings with the suppliers they associate with, regulators, the Code Manager and the Independent Control Panel and their people. |
| 10.3 Paper and electronic supply contracts (including web-based) | | If the customer agrees a supply contract either in an electronic or paper format, a copy needs to be stored on file for at least the length of the contract. |
| 10.4 Submitting Supply Contracts | | The Broker and suppliers must agree: | | * satisfactory security levels. | | * appropriate arrangements and/or service level agreements (SLAs) for submissions and rejections. |
| 10.5 Rejections | | If there are any issues with the contract, the Broker must get in touch with the customer to resolve them before the contract goes to the supplier. If the supplier rejects a contract, the Broker must let the customer know. |
| 11.1 Content | | Where a Broker forms a contract directly with the customer for the service(s) they are providing, the agreement must be clear on the duration of the agreement and any fees that are associated with it, and: | | * include a complaints process thats in line with this Code of Practice (see Complaints). | | * make it clear that the Broker may get a commission from the supplier (see Commissions). | | * not prevent the customer from contacting the supplier. | | * be clear on any charges to the customer for Broker services, including any termination fees. | | The Broker is responsible for making sure they only present and/or sell micro-business customers energy products and/or services that are right for their business needs and circumstances. |
| 11.2 Letter of Authority (LoA) | | Where a customer wants the Broker to act on their behalf, the Broker must have a Letter of Authority in place, either presented verbally (which is recorded) or documented (with signature), in clear easy-to-understand language that includes: | | * the name of the Broker. | | * the name of the Managing Agent (if they have one). | | * the customers contact details (name, site address(es), contact person and phone number). | | * a clear explanation of the level of authority that the customer is agreeing to. | | The Broker should provide the customer with a copy of the LOA (together with a copy of any contract). | | Where the Broker has the relevant LOA in place, they should always ensure the customer is in agreement with the contract before they agree on the behalf of the customer. |
| 12.1 Transparent Fees | | If a Broker receives any commission, then they must not market their services as “free”. | | The Broker will tell customers they may be paid a commission. | | If the customer asks, the Broker will also explain: | | * how they are being paid (one-off payment, uplift pricing, etc.) | | * who is paying them (the supplier, a Broker). | | * when they will be paid the commission. | | * if the customer requests this in writing before the supply contract is agreed, the Broker will respond in writing within 7 days. |
| 13. Complaints | | The Broker must have a fair, transparent and effective system for handling any complaints from customers. | | return to top |
| 13.1 In Writing | | The Broker will write up and publish their complaints process clearly, explaining: | | * what the customers rights are, including what they can do if the complaint is not resolved. | | * who they can call (name and phone number). | | * what the steps in the complaints process are. | | * how long each step in the process should take. | | * the escalation process (including the customers right to contact the Ombudsman). |
| 13.2 Training | | The Broker is responsible for making sure all their people are fully trained on their complaints and escalation procedures. |
| 13.3 Response | | As soon as the Broker gets a complaint (in writing or verbally), they must: | | * log the complaint. | | * resolve the problem within 24 hours (and keep a separate log of any complaints that take longer). | | * (if it cant be resolved within 24 hours) reply to the customer in writing at least once, explaining what will happen next and when (escalation). | | * keep the customer up-to-date on the latest developments (and log them). |
| 13.4 Over 7 days | | Any complaints not resolved between the Broker and the customer within 7 days must be escalated to the Code Manager. | | Permission must be granted from the customer before any information obtained is shared with the Independent Code Manager. |
| 13.5 Records | | The Broker must have a system for logging and tracking all customer complaints – and share this information with the suppliers they associate with, regulators, the Code Manager and the Independent Code Panel and their people, upon request. |
| 13.6 Types of Complaint | | The Broker must take appropriate steps to resolve any complaints about: | | * breaching this Code of Practice. | | * mis-selling. | | * people behaviour. | | * their general competence. |
| 13.7 Responsibility | | The Broker and Supplier agree to be bound by the Code Managers decisions, including compensation. |
| 14.1 Responsibility | | The Broker is responsible for making sure they have robust controls and systems in place for making sure their people comply with this Code of Practice and monitor compliance against the Code of Practice. | | The Broker must also be able to show proof of these systems to suppliers, regulators, the Code Manager and the Independent Code Panel and their people, upon request. |
| 14.2 Self-assessment | | Each year, the Broker will be expected to submit a self-assessment questionnaire on their compliance to the Code of Practice to Suppliers. Any failure to complete this self assessment will be regarded as a breach. |
| 14.3 Audits | | Compliance with this Code of Practice is subject to audit and the Broker will be audited by suppliers signed onto this Code of Practice, also the Code Manager or other independent auditors can check them at any time. | | Audits will be in line with data protection and subject to commercial confidentiality. | | No sensitive or personal information will be sent to or retained by auditors; the Auditor will require visibility of this to complete the audit but this will not be removed from the Broker premises. | | The Broker will agree service level agreements (SLAs) for responding to requests from auditors – whether a routine or unscheduled audit, from a supplier, regulator, independent auditor, the Code Manager or the Independent Code Panel and their people. |
| 15.1 Broker | | The Broker is responsible for making sure all their people (including any third parties they use) know and comply with this Code of Practice. | | The Broker should also make their customers aware of the Code of Practice. They are also answerable to the suppliers they associate with, external auditors, regulators, the Code Manager and the Independent Code Panel. |
| 15.2 Suppliers | | Suppliers must audit the Broker to make sure they stick to this Code of Practice, and: | | * record minor breaches, and the results. | | * record and report major breaches and evidence to the Code Manager. | | * provide regular and ad hoc reports to the Code Manager (when asked). | | Suppliers must also: | | * support this Code of Practice in its aim of protecting micro-business customers. | | * give support to the Broker, for example with templates for LOAs and complaints processes. | | * be subject to auditing by the Code Manager, Independent Code Panel or external auditor. | | * promote the Code of Practice. |
| 15.3 Code Manager | | The Code Manager is responsible for the day-to-day running of the Code of Practice, including: | | * monitoring how the Broker perform. | | * bring an underperforming Broker up to standard. | | * having the Code of Practice independently audited each year. | | * an annual review of the Code of Practice. | | * setting sanctions. | | * handling complaints that have escalated beyond a Broker complaints process (and are not covered by the suppliers complaints process). | | * publicising monitoring results and sanctions taken. | | * liaising with the Independent Code Panel. |
| 15.4 Independent Code Panel | | An Independent Code Panel will: | | * consider regular reports on the operation and development of the Code of Practice. | | * offer advice to the Code Manager on all aspects of the Code of Practice. | | * consider appeals against decisions of the Code Manager. | | That means decisions by the Independent Code Panel are final. |
| 15.5 Independent Auditor | | The Code Manager will also appoint an independent auditor to audit the Code of Practice at least once a year and whenever the Code Manager thinks it is needed. |
| 16.1 Breaches | | If a Broker fails to comply with the Code of Practice, it will be treated as a breach, either minor or major. | | Breaches will typically be identified by direct reporting by the Broker or the supplier, for example complaints made to the supplier, Code Manager or via the Code audit process. |
| 16.1.a Minor breaches | | Defined as: a violation of the Code of Practice and/or control weakness resulting in potential harm or damage to the customer and/or customers business. | | These will be managed between the Broker and supplier who will agree what action to take. The supplier will share information about these breaches with the Code Manager. | | Typically minor breaches will be isolated incidents or oversights e.g not giving contact details, mistakes in verification scripts, etc. |
| 16.1.b Major breaches | | Defined as: a violation of the Code of Practice and/or control weakness resulting in potential and/or immediate harm to the customer and/or customers business; also an illegal and/or fraudulent practice. | | These will also be managed between the Broker and supplier and the supplier will report them to the Code Manager straight away. | | Typically major breaches will be systemic or repeated breaches of the Code of Practice or any evidence of fraud or deliberate manipulation e.g., editing call recordings or evidence of fraudulent changes of tenancy. | | An accumulation of minor breaches may also be considered to be a major breach. |
| 16.2 Sanctions | | If a Broker breaches this Code of Practice, they face sanctions including: | | * written warnings (which may include the requirement for additional controls and monitoring). | | * suspension (for a stated period of time reliant upon requested actions being satisfied). | | * expulsion (in the event of a Broker being expelled from the Code of Practice, this will be for a minimum of 12 months, during which they will be subject to an independent audit at the expense of the Broker before being considered for re-entry). | | and more, such as legal action if reportable to the police. | | Where a Broker has been suspended and/or expelled from the Code of Practice, participating suppliers will not to accept supply contracts during the suspension and/or expulsion from them and/or any of their people. | | The Code Manager will set the appropriate sanctions (overseen by the Independent Code Panel) and put everything in writing – breaches, action plans, timescales and sanctions. |
| 17. Glossary | | * The Automated Direct Debit Instruction Service allows Direct Debit Instructions (DDIs) to be electronically transferred between originators and paying banks. | | * Audit : An evaluation of the systems, processes and controls in place that monitor compliance to this Code of Practice. | | * Breach : A system, process or control that fails to meet the requirements of this Code of Practice. | | * Broker : A Third Party Intermediary acting on behalf of a customer, using a letter of authority, regarding their energy supply, also includes third parties the Broker uses (for example Sub-Brokers). | | * Business Protection from Misleading Marketing Regulations 2008 o The Business Protection from Misleading Marketing Regulations 2008 and subsequent variations which prohibit businesses from advertising products in a way that misleads traders and sets out conditions under which comparative advertising, to consumers and business is permitted. | | * Change of Tenancy (COT) : A Change of Tenancy is where ownership or occupation of a site is transferred from one legal entity to another and it is proposed that the energy supply will be transferred to another legal entity. A site will always be under the responsibility of a legal entity; if a site is vacant, responsibility lies with the landlord and/or owner of the site. | | * Code Manager : The Independent party who administrates, supervises and manages the day-to-day running of the Code of Practice. | | * Commission : A payment made to a Broker by the supplier a contract has been agreed with, either in the form of a one-off payment or uplift on price. | | * Complaint : Defined as “any expression of dissatisfaction” by a customer towards their Broker or activities by a Broker. | | * Contract submission : The process where a supply contract is presented by a Broker on behalf of their customer to a supplier. | | * Corporate customer : Any business falling outside OFGEMs “Micro Enterprise” definition. | | * Corporate Telephone Preference Service (CTPS) : A central opt out register where corporate customers can register their wish not to receive unsolicited sales and marketing telephone calls to either all their organisation's telephone numbers, or to certain numbers. It is a legal requirement that companies do not make such calls to numbers registered on the CTPS. | | * Customer : Broker client and suppliers end user is referred to as the customer. | | * Customer contract : The agreement between a Broker and their customer to provide them with their services. | | * Data controller : A person who (either alone or jointly or in common with other persons) determines the purposes for which and the manner in which any personal data are, or are not to be, processed. | | * Document retention policy : A set of requirements that a company follows to determine how long it should keep records. | | * Privacy and Electronic Communications Regulations (PECR) : The regulations which implement the Directive of the European Parliament concerning the processing of personal data and the protection of privacy in the electronic communications sector. | | * Electronic contract : An electronic version of the paper contract which can be emailed to the customer. | | * Employment law : A body of legislations that governs the relationship between employer and employees. | | * Escalation process : The process of informing the Code Manager of a complaint that has not been resolved between the Broker and their customer within the set time line. | | * Independent Code Panel : A panel of independent professionals who are responsible for confirming final sanction decisions and taking an overview of the Code of Practice. | | * Information Commissioner : The UK independent authority set up to uphold information rights in the public interest, promoting openness by public bodies and data privacy for individuals. | | * Letter of Authority (LOA) : A document that a customer signs or a script read and recorded which gives authority to the Broker to act on their behalf. Letters of Authority can be of restricted or full scope. | | * Mail Preference Services : A central opt-out register where customers can register their wish not to receive unsolicited mail. | | * Main terms : The key components of a contract which must be presented by the Broker to the customer before the customer enters into a legally binding contract, also known as the “Principal terms”. | | * Managing Agent : A person or organisation who act on behalf of a property owner and who may use a Broker for procuring their supply contracts. | | * Marketing consent : The capture of customers preferences whether they wish to receive marketing information from a Broker through any channel. | | * Micro-business : Has the meaning given to “relevant consumer” (in respect of premises other than domestic premises) in article 2(1) of The Gas and Electricity Regulated Providers (Redress Scheme) Order 2008. | | * Ofgem : The Office of Gas and Electricity Market that regulates the electricity and gas markets in Great Britain. | | * Paper contract : An agreement made on a printed document that has been signed by both Broker and the customer and is legally binding. | | * Regulatory bodies : Public authorities or government agencies responsible for exercising autonomous authority within the Energy market, e.g., Ofgem and the Office of Fair Trading. | | * Rejections : A supply contract submitted to a supplier that is not compliant with the suppliers requirements and therefore returned to the Broker. | | * Representatives : Refers to any person(s) that represents the Broker directly (uses the Broker business name), such as employees, telesales agents, field agents, account managers, etc; whether employed directly or by self-employed agreement. | | * Service level agreements (SLA) : Timescales for processes agreed between the Broker and their stakeholders, for example suppliers and the Code Manager. | | * SME : Small and Medium Enterprises. | | * Supply license condition 7a : The licence condition in gas and electricity supply licences which regulates the sales and renewals of micro business energy contracts. | | * Supply license condition 7b : The license condition in the gas and electricity supply license that states the standards of conduct that suppliers work to with their customers. | | * Supply contract : A legal and binding contract between a Broker customer and a supplier for the supply of gas and/or electricity to business premises. | | * Telephone Preference Services : A central opt-out register where customers can register their wish not to receive unsolicited calls. | | * Third Parties : Another person or company working on behalf of the Broker, such as sub-brokers and aggregators, to sell supplier products. | | * Verbal contract : An agreement that is spoken between the Broker and customer and recorded (e.g., a telephone conversation) and is legally binding. | | * Verification script : A form of words provided by a supplier which must be read by the Broker to their customer prior to them verbally agreeing a supply contract. | | * Vulnerable customers : This refers to a business property that has a residential element and where there an individual or individuas that have a reliance on an energy supply for their well-being. | | return to top |
| Document Control: | | 1. Document Title: Code of Practice. | | 2. Reference: 161139. | | 3. Keywords: Energy Code of Practice | | 4. Description: Code of Practice. | | 5. Privacy: ITIL public shared with all approved people. | | 6. Issued: 11 Jun 2017. | | 7. Edition: 1.4. |
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