'Crippling' energy bills could hit small firms

Thousands of small firms could face "crippling" energy bills after being under-charged for years, a consumer group warned today.

Consumer Focus said it received almost 2,000 complaints last year from small businesses whose energy charges had been under-estimated, and warned that the problem will get worse.

Corner shops, hairdressers and other small businesses could be hit by back-dated bills for thousands of pounds, dealing them a "huge" financial blow, it was claimed.

Audrey Gallacher, head of energy at Consumer Focus, said: "Getting a bill for thousands of pounds out of the blue is a nightmare scenario for any small business, especially in these difficult times.

"With suppliers able to go back six years, supplier mistakes can add up to big debts that could potentially cripple some firms.

"It's important for businesses to ensure they are paying the right amount, but energy suppliers shouldn't treat small businesses in the same way as they would multi-national corporations."

Consumer Focus said small firms should be covered by a voluntary code on back-billing which protects domestic customers, believing it would protect them from large unexpected bills.

David Caro of the Federation of Small Businesses said: "Small businesses have suffered unfair and non-transparent contract terms from uncaring energy suppliers for a long time. Although a micro business' behaviour and consumption is very similar to that of a customer in the domestic market, they are not covered by the same protections and safeguards, which makes small businesses even more vulnerable.

"There is a need for a radical shake-up of the practice of estimated billing, especially when the energy suppliers are in the wrong. A large unexpected energy bill, particularly in these difficult trading times, can be as serious as the last nail in the coffin for a small firm, which is then forced out of business through no fault of its own."