ADR Scheme: Why your energy broker needs to be insured
Back in 2022, it became mandatory for all brokers and Third-Party Intermediaries (TPIs) to be registered with the ADR scheme in order for them to work with microbusinesses. But what happens if your broker doesn’t have insurance and how can you check?
What is the ADR Scheme?
Ofgem set up the TPI Alternative Dispute Resolution Scheme (ADR Scheme) in December 2022. This scheme ensures that energy suppliers only work with brokers and TPIs that are part of the scheme. The scheme is ran independently by Ombudsmen Services to ensure that microbusinesses have a better and fairer experience with their energy contracts.
Does the ADR Scheme apply to my business?
The ADR Scheme is relevant for every microbusiness in the UK. Ofgem defines a microbusiness as any non-domestic consumer who:
- Employs less than 10 employees (or their full time equivalent) and has an annual turnover or balance sheet of less than €2 million; or
- Uses no more than 100,000 kWh of electricity per year; or
- Uses no more than 293,000 kWh of gas per year.
What’s the purpose of the ADR Scheme?
Over 2021 and 2022, Ofgem ran a ‘Microbusiness Strategic Review’. Their report looked at the experiences of microbusinesses when it came to finding their business energy contracts. The review found that microbusinesses were often did not have clear information on the fees they’ll be paying or the commission the broker receives. So, they set up the Alternative Dispute Resolution Scheme (ADR Scheme). This acts as a way for microbusinesses to receive support and resolutions for their complaints regarding energy services.
How can I check that my energy broker is ADR registered?
If you’d like to check whether your energy broker is on the ADR register, the Energy Ombudsman has an online checker tool. You can use this to search your broker and check their registration. If your energy broker isn’t listed, they cannot work with suppliers to provide contracts for microbusinesses. It’s always best to check that a broker approaching your business is on this register before you begin working with them. This ensures you have the correct coverage in case things go wrong down the line.
How does the ADR Scheme work?
The ADR Scheme is completely free for microbusinesses to access if they have complaints. The complaint should always go to the broker or TPI first. If this cannot be resolved directly with them, the process has reached deadlock, or eight weeks have passed without an agreement, then you can escalate the matter using the scheme. You’ll need to contact the Ombudsman to get their help for any complaints.
Need help finding the best energy contract for your business? Our team of energy experts are on hand to provide your business with the best deals for your energy usage and can even help you look for more sustainable options too. Contact our team to find out more about how Flame Energy can support your business.
Powering Success. Power your projects with our water and energy management services.
Reach out today & discover how we can help.