British Gas made exaggerated savings claims to prospective customers over a two-year period, the energy regulator has found.
British Gas is to pay out a £1 million compensation package after energy regulator Ofgem uncovered mis-selling by its salespeople.
The energy giant will pay £566,000 in direct compensation to affected customers, while £434,000 will be paid to the British Gas Energy Trust to help vulnerable people.
Between February 2011 and March 2013, British Gas representatives in Sainsbury’s stores and the Westfield Shopping Centre in London's Shepherds Bush were found to have made exaggerated savings claims to prospective customers.
Tariffs were not compared on a like-for-like basis, with monthly direct debits compared to quarterly payments.
In some cases people were told that they would save money by switching, but actually ended up paying more with British Gas or Sainsbury’s Energy (which British Gas is the supply partner for).
A total of 4,300 affected customers who have been identified by British Gas are being paid an average of £130. However it says that it has been unable to contact around 1,300 ex-customers, so the compensation they would be paid is going to the British Gas Energy Trust instead.
[SPOTLIGHT]British Gas actually brought the issues to the attention of Ofgem itself back in April 2013. Because it acted swiftly to address the mis-selling, Ofgem has decided to accept this £1 million package instead of opening a formal investigation.
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A bad year for energy firms
Research from Citizens Advice last month found that there is currently a “crisis of trust” surrounding energy firms, with more than half of the people surveyed saying they did not trust any energy supplier. That figure is hardly surprising given how many negative stories we’ve had about energy firms this year already.
In June npower was told that if it did not address its billing issues it would be forced to halt all telesales. The month before E.On was fined £12 million for “extensive poor sales practices”, while SSE was also fined for being too slow in connecting customers.
Is it any wonder that energy complaints have reached record levels?
If you aren’t happy with your energy supplier, don’t just sit and take it – switch! You may even save some cash in the process. Head over to our energy comparison centre to check out the cheapest deals available in your area.
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