Ofgem fines SSE £10.5m for misselling to consumers


Sarah Harrison,
Senior Partner,
London, U.K. — (METERING.COM) — April 4, 2013 – Britain’s energy regulator Ofgem is to fine SSE £10.5 million for what it says are numerous breaches of the company’s obligations relating to telephone, in-store and doorstep sales activities to consumers.

The level of fine reflects the seriousness and duration of breaches, the likely substantial harm that they have caused, and the likely gain to SSE, says Ofgem in a statement.

According to Ofgem a failure of SSE’s management arrangements meant that insufficient attention was paid to ensuring compliance with obligations. This enabled misleading and unsubstantiated statements to be made by sales agents to potential customers about savings.

Ofgem found failings at all stages of SSE’s sales processes, from the opening lines on the doorstep, in-store or over the phone through to the confirmation process which follows a sale. In particular, SSE consistently failed, over a prolonged period of time, to conduct its sales activities in a way that would provide clear and accurate information on prices and potential savings to enable customers to make an informed decision about whether to switch suppliers. Although SSE terminated doorstep sales in July 2011, failures in telephone and in-store sales persisted.

“In order to restore trust in the energy market suppliers must comply with their obligations and play it straight with consumers,” said Ofgem senior partner in charge of enforcement Sarah Harrison. “Ofgem’s findings show SSE failed its customers, missold to them and undermined trust in the energy supply industry. Ofgem’s fine reflects an absence of effective management control over energy selling.”

Ofgem does not yet have powers to require companies to award consumer compensation, but anticipates such new powers coming into force through the Energy Bill.

SSE has in place a £5 million misselling fund, where customers can receive compensation if they have been missold to.

Ofgem says investigations are ongoing into two other cases of misselling launched in 2010 relating to Scottish Power and npower, and one launched in 2012 relating to E.ON’s energy sales practices.