Energy brokers are meant to help your business get a better deal—but are they always saving you money? The short answer: not necessarily. Behind the promise of lower bills and simplified contracts can lurk hidden costs that eat away at your bottom line. Whether you’re a small café in Sydney or a logistics firm in Brisbane, understanding the fine print in your broker agreement is essential.
In this article, we’ll unpack the common traps, shine a light on where hidden fees typically hide, and explain how to make informed decisions when engaging with an energy broker.
What Is an Energy Broker?
An energy broker acts as the middleman between your business and energy retailers. Instead of you spending hours comparing electricity and gas plans, they do it for you. Brokers claim they’ll secure you the best rate on the market—but how they get paid, and who they really work for, isn’t always clear.
For a deeper comparison of the different broker models in Australia, read this guide: energy broker.
Common Ways Hidden Fees Sneak In
Let’s get straight to the traps. Not every broker operates transparently, and some structures are designed to keep you in the dark about costs.
1. Commission-Based Markups
Most brokers earn commissions from energy retailers. This is often built into your rate—meaning you don’t see it as a separate charge, but you’re still paying for it. These markups can range from a fraction of a cent to several cents per kilowatt-hour. Over a multi-year contract, that adds up.
If your broker isn’t disclosing who’s paying them or how much, that’s a red flag. You could be locked into a plan that looks cheap up front but costs you more over time.
2. Evergreen Contracts
Some brokers sign you into contracts that automatically renew with little notice. These “evergreen” terms often kick in higher rates after the initial fixed period expires, and unless you’re paying close attention, you might not realise until your costs suddenly rise.
Many businesses only review their contract after a rate spike—and by then, it’s too late to negotiate or exit without penalties.
3. Exit Fees for Broker Agreements
Some energy broker agreements include their own lock-in terms, separate from the energy retailer. These agreements can include cancellation fees, even if you haven’t signed anything directly with the energy provider.
If your broker is managing your contract and they’ve tied you into their own agreement, read the fine print carefully. Ask: what happens if you decide to switch brokers next year?
4. Undisclosed Preferred Retailer Deals
Brokers who only work with a limited panel of providers might not be comparing the whole market. Instead of finding the best deal for you, they may be channelling you towards retailers offering them the highest commissions.
That’s not just a conflict of interest—it’s a risk to your operating budget. Choosing a trusted energy broker means choosing someone who is transparent about their panel size and compensation model.
Here’s how leading energy brokers stack up in transparency and pricing: energy broker.
How to Avoid Broker Rip-Offs
You don’t need to ditch brokers altogether—but you do need to do your homework. Here’s how to stay ahead:
- Ask how they’re paid. If a broker can’t (or won’t) explain their commission or service fee, walk away.
- Request market-wide quotes. Demand comparison across all major retailers—not just the broker’s preferred partners.
- Get terms in writing. That includes any ongoing broker fees or automatic renewals.
- Do your own comparison check. Even if you’re using a broker, compare their deal with independent tools like Energy Made Easy – a government-backed price comparison service.
- Know the contract triggers. Understand when your energy contract can be reviewed, cancelled, or renewed—before signing anything.
A Real-World Example: Café in Fitzroy
Take the case of a local café in Melbourne’s Fitzroy. The owner signed with an energy broker promising “industry-best pricing.” For the first six months, their bills looked fair. But in month seven, prices surged.
Upon investigation, the broker had locked the café into a contract with built-in commission and an auto-renewal clause. The owner tried to switch retailers, but doing so meant paying a $2,000 exit fee—set not by the energy company, but by the broker.
It wasn’t until the business hired a third-party consultant to review the agreement that they realised they’d been overpaying from the start. That’s not a one-off story—it’s happening across Australia.
Are Free Energy Broker Services Really Free?
Some brokers advertise “free” services. But like free-to-air TV, someone’s footing the bill—and it’s usually you.
If the broker isn’t charging you directly, they’re earning from the retailer. That means they might have a financial incentive to recommend a plan that pays them better—not one that saves you more.
Transparency is key. Make sure you’re asking the right questions and reading the full agreement. You should never feel rushed into signing or confused about who your broker really represents.
Compare different models here: energy broker.
Final Thoughts
Energy brokers can offer real value—if they’re upfront, independent, and focused on your needs. But too often, businesses across Australia fall into the trap of inflated rates, hidden commissions, and restrictive agreements.
Don’t assume the cheapest quote is the best. Dig deeper. Ask how your broker gets paid, check for automatic renewals, and compare the offer against trusted public tools. And if anything feels off—step away.
The right broker should work for your business, not just their bottom line.