Home > Business Energy Savings, Energy Bills, Energy Broker, Energy Savings, Uncategorized > Why do we need an LOA (Letter of Authority)?

Why do we need an LOA (Letter of Authority)?

This is a question that I am often asked by customers when informing them that I require a signed LOA. It’s not a legal document, it’s not intended to lock them in to anything untoward. In fact, it’s quite the opposite. One of the reasons for requiring an LOA, is to protect  customers. Simply put, it allows us to ‘act on their behalf, with their authorisation’ when approaching their current energy supplier.

What is an LOA?

Energy Broker LOA

Energy Broker LOA

An energy broker such as myself, acts as an intermediary between the client and the energy companies. However, as our name is not down on your account, the energy company (in particular, the current supplier) requires authorisation by the person whose name is on the bill to allow the broker to speak about the account on their behalf. As many people simply don’t have the time to deal with their bills, or the understanding of them, brokers can liaise on their behalf with the energy company to find out important details that allow us to obtain accurate quotes.

Why do you need an LOA?

Again, this is a common question, with the customer not entirely grasping the need for the LOA and believing that we can quote new prices there and then! Unfortunately this is not so. Anyone that claims to not need an LOA is either:

  • getting you to do the leg work in finding out important details
  • quoting based on estimated details and assumptions
  • acting unscrupulously

When quoting new prices for the customer, we require certain details by which we can obtain a highly accurate set of prices. These key details are:

  • Annual consumptions (EAC – electricity, AQ – gas)
  • MPAN or MPR numbers
  • Site address including postcode
  • Renewal date(s)
  • Current supplier

When speaking with a new customer, we request two things from them, a copy of a recent bill (or for them to complete our Client Info Form) and to sign our LOA.

So what do we do with this? 

With a copy of a bill, we will know who your current supplier is and by knowing the supplier we will know when they send out termination letters and how long we have to act on them. We will be able to see your MPAN or MPR numbers, as they should be on the footer of the bill. We will see what the site address is.  We may find the EAC (estimated annual consumption) or AQ (Actual Quantity) stated on the bill, or more likely is that through calculations, we could work out your approximate annual usage. However, armed with the LOA, we would approach your supplier to obtain these figures, thereby allowing us to quote based on accurate consumption figures, using the previous years usage. The LOA also enables us to attain quotes from certain suppliers, who require us to have an LOA, so it increases our remit.

Why can’t we just provide a price right now?

Unfortunately, price quotations require key pieces of information, as has previously been stated. Prices vary depending upon:

  • Your postcode
  • Your level of consumption
  • Your renewal date
  • Your MPAN/MPR number

not to mention which supplier you choose.

So to summarise, for us to provide our customers with the most accurate price quotation, we require an LOA so that we can obtain all the important information from the current supplier and allowing us to do so with the customer’s authorisation.

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