A LAKES school is one of several organisations who have launched legal challenges to claim back more than £2million in compensation after being ‘ripped off’ by energy brokers.

Sixteen cases from a new venture to recover hidden commissions included in business energy contracts are ready to go to court, with experts predicting the claims market will become ‘the new PPI’.

Among those seeking compensation for more than £200,000 in alleged mis-selling is Windermere School.

The cases and contract reviews are being led by a partnership between energy management company PanoServe and Winn Solicitors.

Richard Hennah, operations manager of Windermere School, said: “Mis-selling of contracts and passing on of undeclared charges is an insidious practice that many customers are not aware of without further scrutiny of their contract and invoices.

“When you appoint a broker to act in your interest you don't expect them to blatantly lie and pass on undeclared charges.

“I was told by our broker that they represented a collective procurement basket made up of schools to deliver savings, and that our unit costs would be frozen for a fixed three-year term at prices competitive to our existing contract.

“It turns out no procurement basket exists and that although the unit price is frozen there are undisclosed charges added that amount to a significant increase.”

PanoServe estimates that more than a million businesses are thought to have been ripped off by energy brokers, as protections introduced in the residential market do not apply.

Around two-thirds of the annual £25billion cost of corporate gas and electricity deals are bought through brokers, and PanoServe has said that it is estimated that over 90 per cent of businesses may have been mis-sold their energy contracts - with hidden fees which can leave firms out of pocket.

Energy firms have already had to pay out £389million in fines and redress payments over the last ten years – 25 per cent to the Treasury and 75 per cent in redress payments – but it is thought this is just the tip of the iceberg.

This month, Ofgem outlined proposals to force energy brokers to disclose how much commission they stand to earn.