What Is A Letter Of Authority (LOA)

A Letter of Authority (LOA) may sound like legalese, but it’s actually a straightforward document that empowers a third party, often an energy broker, to act on your behalf. In the UK, it plays a central role when switching business energy suppliers, negotiating new deals, or managing utilities.

Done correctly, it saves time, streamlines admin, and keeps you in control. In this guide, we break down exactly how an LOA works, what to include, and why it matters for your business energy success.

Why Your Business Needs a Letter of Authority (LOA)

Think of a Letter of Authority (LOA) as a key that unlocks your business energy data legally and securely, giving trusted professionals the ability to carry out important tasks on your behalf, such as comparing tariffs, resolving billing issues, and managing supplier communications, all without compromising your control.

Here’s what a valid LOA enables:

• Request energy quotes from multiple suppliers
• Access your current and historical energy usage data
• Negotiate tariffs and contract terms on your behalf
• Submit termination notices or handle renewals
• Deal with billing errors or supplier disputes
• Initiate and manage meter changes or upgrades

Without an LOA, brokers and consultants won’t get far, and energy suppliers won’t talk to them without your written permission.

What Should Be Included in a UK LOA?

An LOA isn’t legally effective unless it clearly specifies who is authorised to act on your behalf, exactly what actions they’re permitted to take, and how long their authority remains valid, ensuring there’s no ambiguity for either party involved.

Every professional LOA should include:

• Business name and registered company number
• Company address and contact details
• Name of the third party you’re authorising
• Specific permissions granted (e.g. data access, quote requests)
• Start and expiry date of the authority
• Signature of an authorised business representative
• Optional: your company letterhead

📌 Important: LOAs should be issued by someone with the authority to represent your business, usually a director or senior manager.

How Long Does a Letter of Authority Last?

The typical validity of a business LOA in the UK is 12 months, although this can be adjusted based on what the LOA is for.

• Standard LOA: Valid for 12 months unless revoked sooner
• Task-specific LOA: Valid only for the duration of a single project or quote
• Rolling LOA: May auto-renew if not explicitly cancelled

Always note the start and end date, and calendar a reminder if you plan to renew or revoke it.

How to Write and Issue an LOA Properly

Creating a Letter of Authority doesn’t require legal expertise or complicated paperwork. In fact, many reputable energy consultancies offer ready-made templates to simplify the process. However, understanding what makes an LOA truly effective, clear, specific, and legally sound can help ensure your business avoids delays and maintains full control over what’s authorised.

LOA best practices for UK businesses:

• Use your business letterhead
• Clearly name the third-party company
• Be specific about what you’re authorising
• Include validity dates
• Sign and date it properly
• Email or post a PDF copy to the broker and your supplier

Keeping a copy in your company’s digital records is always a smart move.

Digital vs. Paper LOAs: What’s Accepted Today?

As more businesses embrace digital workflows and reduce their reliance on paper documents, it’s natural to wonder whether a scanned or electronically signed LOA holds the same weight as a traditional paper version. With the shift toward online communications and remote authorisations, understanding what suppliers will accept and when a physical signature may still be required is increasingly important for ensuring your LOA is valid and doesn’t cause unnecessary delays.

Here’s what most UK suppliers accept:

• Digital LOAs (PDF with e-signature): Accepted by the majority of UK suppliers
• Wet-signed LOAs (printed and signed by hand): Required by a few traditional suppliers
• Email confirmation of LOA: Not typically valid unless accompanied by a signed document

For speed and security, a signed PDF is usually your best bet, but always check with your energy consultant.

LOA Compliance and Data Protection (GDPR)

Granting a third party access to your utility accounts means sharing sensitive business information, including usage patterns, billing history, and contractual details. That’s why ensuring GDPR compliance is not just a formality; it’s a crucial step in protecting your data, maintaining trust, and avoiding potential breaches or legal complications.

An LOA must adhere to these data rules:

• Third parties must only access data within the scope of their permission
• Brokers should not share or use your data beyond agreed-upon purposes
• You can request the deletion of data after the LOA expires
• The third party should provide a privacy policy on how your data is handled

Always partner with consultants who respect UK data laws and are registered with recognised industry bodies.

How to Revoke a Letter of Authority

You’re never locked into an LOA permanently. If your relationship with an energy broker changes, their services are no longer needed, or you simply feel uncomfortable with the level of access granted, you have the full right to cancel your Letter of Authority at any time, quickly and without penalty.

How to cancel an LOA:

1. Draft a short revocation letter or email stating you’re cancelling the LOA
2. Include your business name, the consultant's name, and the LOA reference if applicable
3. Send it to both the broker and your current energy supplier
4. Request written confirmation of receipt
5. Remove any shared login credentials or data access

Cancellation usually takes effect immediately, but may take up to 5 working days with some suppliers.

How to Spot a Fraudulent LOA Request

Unfortunately, not all energy brokers operate with integrity, and some may exploit the LOA process for their own gain. Fraudulent LOA requests can result in serious consequences, such as unauthorised supplier switches, mishandling of your energy contracts, or even misuse of your confidential business data, all without your explicit knowledge or approval.

Warning signs of an LOA scam:

• The consultant rushes you to sign without explaining the scope
• The LOA lacks details like expiry dates or limits of authority
• You’re promised “government rates” or “exclusive tariffs” with no proof
• They use vague or generic business names without a company registration number
• You’re asked to sign on a blank form or via text message

🚨 Always verify the credentials of any broker and check if they’re listed on industry directories such as the Utilities Intermediaries Association (UIA) or Ofgem-accredited frameworks.

Who Can You Authorise with an LOA?

An LOA isn’t limited to energy consultants alone, it’s a flexible document that can be used to authorise a wide range of professionals to manage utility-related responsibilities on your behalf. Whether it’s for overseeing energy contracts, handling water or telecom accounts, or managing services across multiple business sites, an LOA provides a secure and formal way to delegate access and authority.

Common authorised parties include:

• Energy brokers and switching services
• Facility and energy managers
• Procurement consultants
• Chartered accountants handling overhead reviews
• Multi-site utility coordinators

Just ensure that the party receiving authorisation is qualified and trustworthy.

Real Example: How an LOA Helped a UK Business Save 30%

To see the real-world benefits of using an LOA, let’s explore how one UK-based SME strategically leveraged a Letter of Authority to streamline their energy management, reduce overheads, and ultimately achieve substantial cost savings through expert negotiation and support.

Case Study: London-based Retail Shop

• The Challenge: High unit rates and confusing billing
• The Solution: Issued an LOA to a verified energy broker
• Actions Taken:
• The Result: The shop reduced energy costs by 30% in six months, reinvesting savings into digital marketing

Benefits of Using a Letter of Authority

Still unsure whether going through the process of issuing an LOA is truly worth your time? When you consider the potential savings, reduced admin burden, and expert support it enables, the benefits often far outweigh the minimal effort required to put one in place.

Here’s what an LOA delivers:

• Saves you hours of admin work
• Unlocks better rates from multiple suppliers
• Ensures smoother, faster switching
• Reduces the risk of overpaying or auto-renewal traps
• Keeps your decisions legally protected and traceable

Risks of Not Using an LOA When Switching Energy

Trying to manage everything on your own or worse, granting access to someone without a properly drafted and validated LOA, can easily backfire. Without formal authorisation, third parties may be blocked from accessing your account, important deadlines could be missed, and you may even face complications that cost your business time, money, and credibility.

Common risks include:

• Delays in switching
• Missed contract end dates
• Blocked access to essential energy data
• Invalid or rejected tariff quotes
• Potential legal disputes with suppliers or brokers

Sample LOA Template (UK Business Use) 

To help you get started, here’s a customisable Letter of Authority template suitable for UK businesses. This version includes slightly expanded language for added clarity and legal assurance, while remaining concise and supplier-friendly.

[Your Business Name]
[Your Business Address]
[Company Registration Number]
[Contact Email / Phone Number]

To Whom It May Concern,

We, [Business Name], hereby grant authority to [Broker/Consultant Name], acting as an independent energy consultant/broker, to act on our behalf in all matters related to the procurement and management of our energy supply contracts.

This authorisation permits the named party to:

• Access our current and historical energy usage data
• Request pricing and quotes from UK energy suppliers
• Review and negotiate energy tariffs and contract terms
• Submit termination notices to current suppliers when appropriate
• Communicate directly with suppliers for account-related queries
• Facilitate the switching process and manage contract documentation

This Letter of Authority is effective from [Start Date] and will remain valid until [End Date], unless revoked in writing by an authorised signatory of [Business Name] before the expiry date.

Please note that this LOA does not authorise the consultant to enter into any binding agreements without our prior written consent. All final contract approvals will remain the responsibility of [Business Name].

Should you require any further confirmation, please contact us using the details above.

Signed,
[Full Name of Director/Authorised Signatory]
[Position in Company]
[Signature]
[Date]

✅ Tip: Save a copy of this signed document in your business records, and always confirm with your supplier that they’ve received and accepted it.

Summary Points

• A Letter of Authority allows a third party to manage business energy tasks
• It ensures secure data access and efficient supplier switching
• Most LOAs in the UK last 12 months unless cancelled sooner
• You can issue or revoke an LOA easily with a signed letter
• Always verify the credentials of the person or firm receiving access

Frequently Asked Questions (FAQ)

Q1: Is a Letter of Authority legally binding?

A1: Yes. Once signed, it provides legal permission for a third party to act within the scope defined.

Q2: Can I issue an LOA online?

A2: Yes, a digital PDF with a valid signature is accepted by most UK energy suppliers.

Q3: What happens if I don’t issue an LOA?

A3: Your broker won’t be able to act or request information, and supplier switches may be delayed or denied.

Q4: Does an LOA give full control over my accounts?

A4: No. It only grants the specific permissions you outline. You remain in control of contract approvals.

Q5: Is an LOA needed for telecoms or water switching, too?

A5: Yes, LOAs are commonly used for switching water suppliers, broadband providers, and waste services.