Switching business energy or commercial water suppliers can be a pain, which is why AquaSwitch exists.
But in order to do our job, we require an LOA from you so that we can talk to suppliers on behalf of your business, making the switching process hassle-free.
We want you to understand exactly what you’re agreeing to, so in this guide we discuss LOAs in fine detail, including the nuances and pitfalls to watch out for!
Contents
What is a Letter of Authority?
A Letter of Authority (LOA) is a legal document that serves as a formal agreement between a broker and their customer.
The LOA grants permission to a broker to act on behalf of a business, allowing them to interact with other businesses within specified limits.
It acts as a permission slip that enables the broker to represent the customer and negotiate with other businesses. Although commonly associated with the energy industry, LOAs are common in other industries such as medical services and finance.
By granting an LOA, the customer delegates specific tasks to a third-party broker, such as obtaining commercial energy quotes, allowing the broker to act on the customer’s behalf without the customer needing to be present for every interaction or negotiation.
The LOA is a legally binding agreement that outlines the scope of services and duration of the agreement (usually 12 months). The agreement is essential to protect the customer’s interests and ensure the broker or consultant operates within the agreed-upon limits.
In this way, businesses can focus on their core operations while delegating specific tasks to experts, knowing that a legal agreement protects their interests.
What authority does an LOA allow a broker to do?
The process and authority provided by an LOA to a business utilities broker like AquaSwitch is different for business energy and water as the process and authority differ:
Business Energy
When switching business energy suppliers, an LOA allows your broker to:
- Access industry-held data, including consumptions, contract end dates, and metering information.
- Contact your current supplier to resolve any issues and authorise any required adjustments, refunds, or amendments to business energy bills.
- Issue termination notices should the need arise and opt out of future contract renewals on your behalf.
- Raise and deal with complaints on your behalf to a satisfactory resolution.
Business Water
When switching business water suppliers, An LOA enables your broker to:
- Access industry-held data, including consumptions, contract end dates, and metering information.
- Issue termination notices should the need arise and opt out of future contract renewals on your behalf.
- Request, receive and negotiate quotes from business water suppliers.
- Contact your current supplier to resolve any issues and authorise any required adjustments, refunds, or amendments to business water bills.
- Handle any objections as a result of the switching process with current suppliers.
What is the process after I submit a Letter of Authority?
Most brokers will send you a digital copy of the LOA for you to review and sign.
Once you have signed this document, an alert will be sent back to your broker, letting them know you completed the LOA.
Your broker will then submit this to suppliers to obtain prices and industry-held data. If you choose to switch suppliers, your broker will use the LOA to get a draft contract from your chosen business energy supplier.
What to watch out for when signing an LOA?
Auto-renewal clauses. When completing an LOA, ensure that the LOA meets your required needs. Some brokers may have an auto-renewal clause written in their LOA or other supporting documents.
This would mean they could automatically renew your contract when it is in your renewal window. If you don’t want to do this, ensure that you opt out of this clause.
How long is a Letter of Authority valid?
An LOA is typically valid for 12 months; this will be clearly stated on the LOA.
If you are unhappy with the length of the LOA, you can either shorten or extend this depending on your preference.
Who can sign a Letter of Authority?
Generally, an LOA can be signed by an authorised representative of the company or organisation, such as a director, officer, or manager, who has the legal authority to enter into agreements on behalf of the organisation.
Sometimes, the individual may need to provide additional documentation or proof of their identity to confirm their authorisation to sign the LOA.
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