Liars! The energy firms must be stopped from ripping us off
Yesterday’s £10.5m fine of Scottish and Southern Energy for widescale mis-selling tells us two important things. First is the pleasing fact that the energy Watchdog Ofgem is finally getting tough and, on top, is demanding stronger powers. Second, and related of course, is the fact there will be more massive fines to come.
SEE was slapped with a record fine after it was caught lying to customers about prices and the supposed savings that could be made by switching. The dodgy tricks the firm was caught using to mislead customers so it could flog them more expensive deals included:
• customers were told they would save money but then switched to a more expensive contract
• unscrupulous salespeople claimed that customers could make much larger savings by switching to SSE than were actually possible
• customers were told they would get reductions they’re entitled to, “just like the government intended”, although there was no such thing
• salespeople slagged of rival suppliers, telling customers that other firms were making “all sorts of false promises”
• claims were made that rival suppliers were putting prices up, or that other suppliers’ price increases were higher than they actually were
• some SSE sales staff claimed the firm offered a “preferred customer tariff … with no standing charge if you want”, but didn’t tell customers they would be charged higher first tier unit rates instead of a standing charge.
The news prompted calls for a criminal investigation with several MPs suggesting the mis-selling amounted to “fraud”. One thing’s for sure, if you or I tried to flog stuff for more than it was worth while lying about its features, we wouldn’t be too surprised to then have our collars felt by the local rozzers.
But it’s not just SSE that’s in the frame for mis-selling. Rival Big Six firms Scottish Power, nPower and E.on remain under investigation by the Watchdog for dodgy sales practices. Meanwhile, in 2012, EDF was fined £4.5m for mis-selling by the Watchdog.
This week’s £10.9m fine will be paid to the Treasury. However, SSE has a £5m mis-selling fund, where customers can receive compensation if they have been mis-sold to. It claimed yesterday that all customers financially disadvantaged because of the breaches should have received a letter. [However, if you’re one of the estimated 20,000 victims of misselling by SSE, you can make a claim by calling 0845 0707388.]
I’d like to see further penalties made on energy companies caught lying. Ofgem can fine firms but can’t actually force them to award compensation to customers they have ripped off. That should change in the upcoming Energy Bill but the change can’t come soon enough. The regulator seems ready to bare its teeth at rogue firms but needs stronger powers to do so.Tagged in: E.on, EDF, Energy, mis-selling, nPower, Ofgem, Scottish Power, SSE
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