MPs to debate legislation targeting fraudulent intermediaries selling electricity, gas

Photo: European Commission

The Energy Regulatory Office received almost 14,300 formal complaints from consumers last year, a six percent increase in annual terms, the bulk of them over the practices of intermediaries in energy auctions. Thousands more complaints have been directed to the Czech Trade Inspectorate, the website reports, noting most victims are senior citizens.

In most cases, under various pretexts the fraudulent intermediates trick seniors into signing a power of attorney which allows a third part to change supplier or apply to an energy auction in the victim’s name. Some of the fraudsters represent themselves as Energy Regulatory Office staffers. If a consumer attempts to withdraw from the contract, they are threatened with large “fines”, visits by enforcers and foreclosures.

Currently, virtually anyone can become an intermediary and act as an energy trader. The lower house of Parliament this week is set to debate an amendment that would set out a precise definition of an energy contract intermediary, and require the Energy Regulatory Office to certify them, keep a register of people doing the work and supervise their activities, writes.

The amendment stems from a draft proposal put forward by the Ministry of Industry and Trade in November 2018. It envisions imposing fines of up to 15 million crowns on dishonest energy brokers and their removal from the future Energy Regulatory Office register.

Among other things, it would oblige intermediaries to inform consumers there are "only" an intermediary and must prove their identity and certification, registered office address, and business identification registration number.

If adopted, it will also no longer be possible to conclude fixed-term contracts that (including extensions) exceed 36 months. After this period, they will be considered as a contract of indefinite duration.

Last spring, 14 energy suppliers, which together control 80 percent of the Czech market, signed the Declaration of Electricity and Gas Market Participants for Consumer Protection in which they voluntarily undertook to share their notice periods, not to conclude contracts with a duration of more than 36 months and to promote the establishment of a register and the certification of intermediaries.