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What is a letter of authority?

So, what is a letter of authority? Our business energy comparison expert guide is here to help you understand.

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What is a Letter of authority (LOA)?

Switching energy suppliers can be a headache for any business owner. If you’ve decided that you want to switch your business energy, or are in the process of doing so, then you might have come across the term ‘letter of authority’.

We’ll outline its purpose, how it can help you save money, and what you need to do.

What is a letter of authority and what is it used for?

A letter of authority (or LOA) is a legal document that allows a third party, such as an energy broker, to correspond with other services, such as energy companies, on behalf of you and your business. The LOA will outline and stipulate the tasks that the third party must undertake. It’s essentially a special permission slip that allows another person or party to speak to another business.

LOAs are designed to reassure customers that the person they’ve appointed will keep their account information, billing details, and personal information safe and secure. It also ensures that they act in their best interests and outlines parameters for them to stick within.

Letter of authority examples

Below are some examples of the permissions included in an energy LOA:

01 Handle queries

If you’re time is tight, then the LOA will allow your energy broker to deal with any service or billing queries on your behalf.

02 Submit meter readings

They can also submit meter readings or collect data on your energy consumption from your supplier.

03 Request historical information

An energy broker can ask your current provider for any historical information, including contract end dates, energy consumption, and prices. This can help them find you a better business energy quote.

04 Raise a complaint

If you’re not happy with the service from your supplier, then the LOA allows a broker to complain on your behalf.

05 Find a better deal

Brokers can ask for quotes from different suppliers and negotiate a better rate that suits the needs of your business.

05 Start your switch

With a LOA, an energy broker can complete all the necessary paperwork to switch business energy supplier.

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Usually, a letter of authority is valid for 12 months from the date of signature, but this isn’t always the case. The LOA will state how long they’re valid and it will be clearly stated if the letter is valid for less than 12 months.

If your LOA has expired, then you will be asked to sign another one for your energy broker to be able to continue acting on your behalf.

How do I write a letter of authority?

Writing an official document can seem daunting, but don’t worry, you won’t need to write a letter of authority. These are normally written by your consultant or energy broker. Once it’s been written, ensure that you read it through carefully and make any amendments that you see fit. You are entitled to request any clause changes you don’t agree with before you sign.

If you want to write your own LOA, then you’ll need to include the following details.

  • Name, address, and contact details of you and your third party
  • Specifications on which person/company is granting permissions to the
  • Details of what you’re permitting the third party to do
  • Level of access
  • Duration of agreement

Use clear and concise language and ensure that all spelling and grammar are correct. The letter of authority is a legal document and can be used as evidence during a dispute, so make sure you are as specific as possible.

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Does Business Energy Comparison provide an LOA?

Here at Business Energy Comparison, we’re dedicated to finding you the best deals on your business electricity comparison and help you compare business gas prices. We also know how stressful it can be to switch to a new supplier. That’s why we’ve taken the headache out of finding energy quotes that fit the needs of your business.

We want to make our customers’ lives easier – you are running a business after all – that’s why we’ll provide you with our own letter of authority. If you are still unsure about anything, contact our friendly experts who will help answer any of your questions.

Frequently Asked Questions

What happens once a letter of authority is submitted?

Once you’ve submitted your letter of authority, it usually takes around seven to 21 days to be approved. Then, when the contract has gone live, your energy broker or third party will get started on finding you the best deals for your business energy.

Who can sign a letter of authority?

A letter of authority is designed to create a relationship between a business and a third party, allowing the third party to act on behalf of the business. Therefore, for a LOA to be official, both parties need to sign.

Is it safe to sign a letter of authority?

As with all legal documents, it’s imperative that you read all the information and fully understand it before proceeding. You are allowed to question any clauses and ask for clarification or request that they be removed. A LOA gives authority to a third party to make decisions on your behalf and act in your best interest, so once you’ve been happy with the permissions, it is safe to sign.