E.ON fined £12m for mis-selling – Updated
Energy company apologises for ‘completely unacceptable’ behaviour
E.ON has been fined £12m after being found guilty of mis-selling energy between June 2010 and December 2013.
According to Ofgem, the penalty is due to “extensive poor sales practices” and the failure to ensure staff were properly trained and compliant when it comes to selling to consumers. Customers were consequently given false information when being advised to sign up to new energy tariffs.
The £12m will be shared between the 333,000 consumers who currently benefit from the Warm Home Discount Scheme.
Between £3m – £8m for those affected
The gas and electricity supplier could yet have to pay a further £8m, taking the full cost of the operation to £20m, as part of the compensation for the 465,000 consumers affected.
Each is in line for an average payment of £67. E.ON says payments will be sent out in a few weeks.
‘Fine will only serve to further increase consumers’ cynicism’
Tom Lyon, energy expert at uSwitch.com, said: “E.ON’s behaviour is disappointing, particularly given the length of time these poor practices went on for and the fact that they were happening as recently as last December.
“Trust in the industry is already at an all-time low and this fine will only serve to further increase consumers’ cynicism towards energy suppliers. Our research shows that almost three quarters of consumers would now switch to a small supplier – up from 56% last year – which is clear evidence of the dwindling loyalty amongst big six customers”
Fine is a reminder for consumers to take control of energy costs
“However, a ray of light is that E.ON has engaged positively with Ofgem throughout the process and is committed to putting things right. It is encouraging to see that the £12 million is going directly into the pockets of the most vulnerable customers rather than being taken as a fine,” added Lyon.
“This fine highlights the importance for consumers to fully research the best energy tariff for their needs before signing up to an energy contract. It will also serve as a warning to small suppliers now entering the market who must learn from the mistakes of the big six and operate in a way that keeps customers at the heart of what they do.”
‘We’re putting this right’
CEO of E.ON, Tony Cocker, apologised: “We are really sorry and want to make it absolutely clear that we’re putting this right.
“It is completely unacceptable that we may have been unclear with customers about their tariff choices and as a result those customers may not have made the best choices for them.
“There was no organised attempt to mislead, and Ofgem has acknowledged this, but that does not excuse the fact we did not have in place enough rules, checks and oversight.”
Cocker added that the company had stopped doorstep selling and cold calling prospective customers, as part of a previous overhaul of the business model.
Customers who think they have been affected by E.ON’s mis-selling, can call a dedicated hotline on 0800 0568 497 for more information.