E.ON fined £12 million for ‘extensive poor sales practices’
E.ON has been fined £12 million for large scale mis-selling by energy watchdog Ofgem.
Energy giant E.ON has been fined £12 million after an investigation by regulator Ofgem found that it had broken rules surrounding the sale of energy to its customers.
The money will be paid back to customers who were mis-sold deals, including automatic payments for some vulnerable customers.
In 2013, E.ON came under fire when energy efficient light bulbs meant for free distribution as part of the Government’s (now defunct) Carbon Emissions Reduction Target (CERT) were found for sale in the Republic of Ireland.
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Poor sales practices
Ofgem found that between June 2010 and December 2013, E.ON was guilty of "extensive poor sales practices". Given the length of the period of time under question, it’s likely that a considerable number of customers were on the receiving end of this mis-selling, and could qualify for a repayment from the company.
It was revealed that E.ON failed to properly train and monitor both its own staff and those employed via third party telesales agencies. The result was that inadequately trained staff were giving out incorrect information which could have misled customers, both on their doorsteps and over the phone.
It was also found that key terms of a contract were not necessarily made clear before the contract was agreed.
The senior management of the company failed to identify these issues or act on them when discovered, although they didn’t set out to deliberately mislead customers, Ofgem said. However, effort put into complying with energy sales rules was declared “insufficient.”
Because E.ON acknowledged its failing and agreed to change its processes, it has avoided a heavier fine.
Last year both npower and Scottish Power were forced to hand back millions of pounds after breaching sales rules.
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Repayments
As part of the repayment package, E.ON has agreed to pay around £35 to approximately 333,000 of their customers who receive the Warm Home Discount – groups such as pensioners, disabled people and low income families.
Automatic payments will be made to some vulnerable customers who may have been affected.
E.ON will be writing to 465,000 customers who may have been mis-sold to. A dedicated hotline (0800 0568 497) has been set up so that people who may have been affected can claim compensation.
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[I]Incidentally, E.on also manipulated dates and correspondence which effectively prevented me from appealing to Ofgem during my dispute with them.[/I] That sounds typical of the staff of this company. I have found them to be untruthful, rude and childish. If they were the only electricity company in the country I would go offgrid. In my opinion, they should be shut down. Until Ofgem is given some proper teeth - such as the power to shut a company down - then companies like E.on and npower will continue to treat their customers like cattle. My latest strategy is to do business with SSE. I have also bought shares in this company. If I have any trouble with them, I just turn up at the AGM and haul the CEO over the coals, naming anyone who has given me grief. You can also do this with United Utilities.
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I was definitely mis-sold to. I was lured into switching to E.on with a promise that I would get a LOWER rate which was a prepayment tariff available to pensioners through Age UK. In fact the tariff was already scheduled for withdrawal even before I talked to the sales rep. in my local High street. I fought E.on for months to get what I was promised. They then said - we'll put you on that tariff, but it is actually the same as the one you were on. How could it possibly be if they said it was lower when I joined. Ah they said, it's gone up to the same as the standard prepayment tariff. They were playing with words all the time. I did eventually get what they described as an ex.gratia payment for having been misled but it was paltry, much less than six month's difference between the tariffs that I was advised existed when I switched. So, technically now, I should get this further £35 as I am on Pension Credit and entitled to Warm Homes Discount. But what I want to know is this. Is the money they are giving out what you are calling a fine, or an addition to the fine. And if it isn't the fine, where is the fine going? I suspect it is going into the coffers of our greedy Government or their quango Ofgem. Why isn't the whole of the fine going to those of us who were cheated and inconvenienced? Incidentally, E.on also manipulated dates and correspondence which effectively prevented me from appealing to Ofgem during my dispute with them.
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I wonder why EON has been singled out - aren't they ALL equally guilty. Over the years I have been approached by reps from all the major suppliers, and they all said they could save me money - EVEN the supplier I am already with, before I let that fact be known. One fact IS obvious, if the reps are paid by results, then you can take anything they say with a pinch of salt. I am not blaming those reps - they have to make a living the same as the rest of us - but commission-based selling is a recipe for this kind of behaviour. Better to do your own research (and that doesn't necessarily mean the use of comparison websites, for they too are caught up in the same "commission" argument). All suppliers have their own websites - use them directly, not via any "links".
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19 May 2014