British Gas hit by mis-selling scandal – Updated

The UK’s largest supplier will reportedly pay out £500,000 to 4,300 affected customers

British Gas

British Gas will pay 500,000 for mis-selling energy

Updated – uSwitch, British Gas comment

According to Sky News, British Gas has paid out £500,000 compensation to customers who were misled as part of the energy giant’s face-to-face sales process between February 2011 and March 2013.

The vast majority of affected customers signed up to tariffs sold under the Sainsbury’s energy brand, but which were sold through British Gas as part of a partnership deal.

Ian Peters, managing director of British Gas Residential, has apologised for the supplier’s actions: ”We are very sorry and have ensured no customer will be out of pocket as a result.”

Households to receive about £130

Consumers were misled by British Gas staff with regards to the savings they would achieve by switching to the plans.

The gas and electricity provider will be making goodwill payments of roughly £130 to those affected.

Inside sources told Sky News that British Gas had referred itself to Ofgem for the breach.

‘Only right that compensation will go directly to the customers affected’

Tom Lyon, energy expert at uSwitch, said:“Whilst mis-selling does little to improve consumers’ high distrust in the energy industry, the stance taken today by Ofgem and British Gas is absolutely appropriate. It’s only right that compensation will go directly to the customers affected by this, along with helping vulnerable groups.

“We hope that the energy industry continues to draw a line under its past behaviour and focuses on rebuilding trust with consumers.

“Today’s ruling also serves as a reminder of why people should always seek independent, impartial and whole-of-market advice before switching. This is the only way for consumers to ensure that they are getting the best deal for their needs.”

Each of the big six guilty of mis-selling

Although the overall fine of £500,000 is relatively small (SSE was fined £10.5m for mis-seling and E.ON £12m, for example), it is important as now each of the big six energy suppliers has been found guilty of mis-selling.

British Gas, Sainsbury’s Energy and Ofgem have yet to issue a comment.

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