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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