A Letter of Authority (LOA) lets an energy broker talk to your suppliers and gather information on your behalf. A standard information-only LOA covers the groundwork: finding out when your contract ends, your annual consumption, and what rates you are on.
It should not let the broker sign a contract for you unless you have clearly and knowingly agreed to give them that authority.
That is the important distinction to look for before signing. This guide explains what an LOA should cover, what it should not cover and how to spot wording that goes further than you expect.
What is a Letter of Authority?
An LOA is a document confirming that your business has authorised a broker or consultant to communicate with your energy suppliers on its behalf.
Suppliers will not discuss an account with an unrelated third party. The LOA is the broker’s proof that they have permission to request information and speak to the supplier about your energy supply.
What the broker can do beyond that depends entirely on the wording, so it is worth reading the document carefully.
What should an LOA allow your broker to do?
A standard LOA may allow your broker to:
- Obtain contract details and renewal dates
- Request consumption and billing information
- Confirm meter numbers and supply details
- Review account and metering arrangements
- Request quotations from suppliers
- Investigate billing, transfer or account problems
- Communicate with suppliers about a query
- Handle the paperwork for a change of tenancy, such as closing an account or arranging the supply at new premises
These permissions allow the broker to build an accurate picture of your current position and approach the market with the right information.
Without an LOA, you may need to contact each supplier yourself, request the relevant information and work out which details are needed before a meaningful comparison can be completed.
Should an LOA allow a broker to sign a contract?
Short answer: only if you have clearly and knowingly agreed to that.
Some LOAs are limited to gathering information and communicating with suppliers. Others include wording that allows the broker to accept offers or enter into contracts on your behalf.
These are two very different levels of authority, and the second is a much bigger commitment.
Information-only wording might say:
“I authorise [Broker] to request information about my energy supply from suppliers and to obtain quotations. This authority does not permit [Broker] to enter into, renew or vary any contract on my behalf.”
Wording that goes further might say:
“…and to agree, sign or renew contracts on my behalf.”
Watch for phrases such as:
- Enter into contracts
- Accept offers
- Agree prices
- Execute agreements
- Renew or extend contract
- Appoint as agent
If you see wording like this, ask the broker to explain in writing exactly what it means and when that authority could be used. We advise customers to retain control and approve every contract themselves, so ask for any wider permissions to be removed if you are not comfortable with them.
Unfortunately, we have supported too many businesses in the past that did not realise what they had authorised until a long and expensive contract had already been agreed on their behalf. Taking a few minutes to check the wording before signing can prevent a very costly problems later.
At Cope Energy, trust comes first. Every contract arranged through us must be reviewed and signed by the customer. We do not sign energy contracts on our customers’ behalf, and our LOAs do not give us permission to do so. You remain in control throughout the process.
What information should the document contain?
A clear LOA will normally include:
- Your business name and address
- The name of the broker being appointed
- The MPANs, MPRNs or sites covered
- The actions the broker is authorised to take
- The start date and duration of the authority
- The name and position of the person granting permission
- A signature and date
It should be specific enough for you to understand its purpose without having to decipher complicated legal language.
What should make you pause before signing?
Be cautious if an LOA:
- Gives the broker broad or unlimited authority
- Allows contracts to be agreed without stating that clearly
- Does not say how long the authority lasts
- Covers services unrelated to what you requested
- Cannot be clearly explained by the person asking you to sign it
A Letter of Authority is a useful working document, but it still gives another business permission to act in relation to your energy account. You are entitled to understand exactly what you are authorising.
Can you withdraw a Letter of Authority?
Usually, yes. Check the document to see how it can be withdrawn and whether a notice period applies.
It is sensible to notify both the broker and the relevant suppliers in writing and keep a copy of the correspondence. Suppliers may need time to update their records.
Withdrawing an LOA prevents the broker from continuing to obtain information or communicate about your account using that authority. It does not cancel an energy contract that has already been agreed.
The authority and the supply contract are separate, which is why it is important to understand what the LOA permits before signing it.
Quick FAQ
Can a broker switch my supplier using an LOA?
Only if the LOA, or a separate agreement you have approved, gives the broker that authority. Many information-only LOAs do not.
How long does an LOA last?
It should say. If it does not include an end date or explain how it can be withdrawn, ask before signing. Cope Energy’s LOAs remain valid for 12 months from the date of signature.
Do I have to sign an LOA to get quotations?
Not always. A broker may be able to provide indicative prices using information from a recent bill. An LOA is normally needed when the broker must obtain verified contract, consumption or account information directly from your supplier.
What if something goes wrong?
Raise the issue through the broker’s complaints process first. They should explain how the complaint will be handled and what independent escalation options are available if it cannot be resolved.
A good LOA does the groundwork and leaves the decisions with you
A good Letter of Authority should make the process easier without taking important decisions out of your hands.
Before signing, check what the document covers, how long it lasts and whether it allows the broker to agree contracts on your behalf. If anything is unclear, ask for an explanation in writing.
If you would like us to walk you through your current contract position or explain any document we send you, we are more than happy to help.
0333 2100460 | info@copeenergy.co.uk