If you have ever used a business energy broker, you will almost certainly have signed a Letter of Authority or LOA. You may have done it quickly, perhaps as part of a longer onboarding form, without giving it much thought.
That is completely understandable. But it is worth pausing to understand exactly what that signature means, what your broker is now authorised to do on your behalf, and critically, what they are not allowed to do.
Because while the vast majority of energy brokers use a Letter of Authority responsibly, some do not. And when an LOA is misused, UK businesses can find themselves locked into contracts they never agreed to, paying rates they never approved, and dealing with suppliers they never chose.
This guide explains everything you need to know in plain English.
What is a Letter of Authority?
A Letter of Authority is a legal document you sign that gives your energy broker permission to act on your behalf when dealing with energy suppliers. Think of it as a proxy; you are authorising another party to speak, negotiate and correspond with suppliers as if they were you.
In practical terms, an LOA typically allows an energy broker to:
- Contact energy suppliers on your behalf
- Request quotes for your business energy contracts
- Access your current contract and account information
- Communicate with your supplier to manage your account
- In some cases, agree to contract terms on your behalf
An LOA is a standard and legitimate part of how business energy brokerage works. Without one, an energy broker cannot approach suppliers on your behalf. The problem is not the LOA itself; it is when brokers go beyond what the LOA permits, or use it in ways the business owner did not understand or intend.
What Can an Energy Broker Legally Do With Your LOA?
A properly used LOA gives your broker a specific, limited set of permissions. At Kilowatt Energy, we operate under a strict TPI Code of Practice, which sets out exactly what we are and are not authorised to do.
A compliant broker should only use your LOA to:
- Obtain quotes from energy suppliers on your behalf
- Share your consumption data with suppliers to get accurate pricing
- Communicate with your current supplier about your account
- Present quotes to you so you can make an informed decision
- Act on your instruction and only your instruction to proceed with a switch
Every action taken using your LOA should be in your interest and on your instruction. The moment a broker uses your LOA to take actions you have not approved, particularly signing contracts, they are operating outside what is legally and ethically acceptable.
How Some Energy Brokers Misuse a Letter of Authority
Unfortunately, LOA misuse in the UK business energy market is not rare. Here are the most common forms:
Signing a contract without your explicit consent — Some brokers use a broadly worded LOA to sign your business up to a new energy contract without asking you to approve the specific deal. You discover what has happened when a new contract confirmation arrives unexpectedly.
Auto-renewal without your knowledge — Some brokers use your LOA at the end of your contract to automatically roll you onto a new deal — often at a higher rate — without contacting you first.
Sharing your data beyond what is necessary — Your consumption data is commercially sensitive. Some brokers share it with marketing partners or third parties in ways you never agreed to.
Using an expired LOA — LOAs should have an expiry date. Using one that has expired to take action on a current account is a clear misuse.
Acting without keeping records — Under Ofgem’s guidelines, brokers should keep clear records of every action taken on your behalf. A broker who cannot produce those records is operating without proper accountability.
Real-world example: A UK business owner signed an LOA with a broker to explore energy options. Weeks later, they received a contract confirmation from a supplier they had never approved. The energy broker had signed the contract without the client’s knowledge, earning a commission on a deal the client had never agreed to. Cases like this are reported regularly.
How to Check Your Broker is Using Your LOA Correctly
Read the LOA before you sign — if it says the energy broker can “agree to contracts on your behalf,” ask why that permission is needed.
Check the expiry date — a compliant LOA should expire within 12 months. No expiry date is a red flag.
Ask how they get paid — a transparent broker will tell you upfront whether they earn a commission. Brokers who refuse to answer should be treated with caution.
Confirm before any switch — no contract should ever be signed without your explicit approval. If a broker presents a contract as already agreed, challenge it immediately.
Request all correspondence — you are entitled to see every communication your broker has had with suppliers on your behalf.
What Ofgem Says About Energy Broker Conduct
Ofgem has been increasingly focused on broker conduct because LOA misuse has become a recognised problem in the market. Ofgem’s guidance makes clear that brokers must act in the best interests of the customer, be transparent about how they are paid, and obtain proper consent before committing a customer to any contract.
If your broker has signed you up to a contract you did not explicitly approve, you have the right to raise a formal complaint with the broker directly — and if unresolved, with the Energy Ombudsman.
Warning Signs That Your LOA May Have Been Misused
- You receive a contract confirmation from a supplier you did not choose
- Your energy bills change unexpectedly without a conversation you remember having
- Your broker cannot show you a copy of the LOA you signed
- You are told a contract has already been agreed on your behalf
- Your broker is evasive when you ask how they earn their fee
- You are contacted by a new supplier who says your broker arranged a switch
If any of these apply, contact your current supplier directly not through the broker and ask for a full account history.
How Kilowatt Energy Uses Your LOA
At Kilowatt Energy we are completely transparent about how we work. We will always explain what your LOA authorises us to do before you sign it. We will never sign a contract on your behalf. We will tell you upfront how we earn our fee. We keep full records of every action we take on your behalf. Our TrustedConnect service also protects you from cold-calling brokers who use LOAs aggressively to acquire business without consent.
We built Kilowatt Energy precisely because the practices described in this article are real, they are common, and UK businesses deserve better.
Speak to Kilowatt Energy Today
If you are concerned that your Letter of Authority may have been misused, or if you want to work with a broker who is fully transparent from day one, we would be happy to help. Our consultations are free, there is no obligation, and we will never pressure you into a decision.
