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04/04/2013
Ofgem To Fine SSE £10.5m
Ofgem has announced it will fine energy company SSE as much as £10.5m for misselling.
The energy watchdog said it would fine SSE for "numerous breaches of its obligations relating to telephone, in-store and doorstep sales activities".
A report by Ofgem said it found failures within SSE at "every stage" of the sales process and management failures which led to "prolonged and extensive misselling".
The fine is largest ever imposed on an energy supplier in the UK.
Ofgem says insufficient attention was paid to ensuring compliance with obligations at SSE, meaning customers were fed misleading and unsubstantiated statements about savings that could be made.
It also found failing at "all stages of SSE’s sales processes", from the opening sales pitches on potential customers' doorsteps, in-store or over the phone, right through to the confirmation process which follows a sale.
Although SSE terminated doorstep sales in July 2011, Ofgem says failures in telephone and in-store sales persisted.
Sarah Harrison, Ofgem’s senior partner in charge of enforcement, said: "In order to restore trust in the energy market, suppliers must comply with their obligations and play it straight with consumers. Ofgem’s findings show SSE failed its customers, missold to them and undermined trust in the energy supply industry.
"These failings did not just take place on the doorstep but also in the management of SSE. Ofgem’s fine reflects an absence of effective management control over energy selling.
"Today’s fine sends a clear message to suppliers that Ofgem will hold to account those companies which fail to treat consumers fairly. It is time for the energy industry to take note and get behind Ofgem’s reforms to rebuild trust and make the market simpler, clearer and fairer for consumers."
Ofgem said it does not possess powers to oblige companies to award consumer compensation, but it has argued for powers of redress.
It says the government is backing its call by providing new powers in the Energy Bill.
SSE now has a £5m mis-selling fund, where customers can receive compensation if they have been the victims of mis-selling.
Customers can contact the fund via the dedicated line on 0845 0707 388.
(IT/CD)
The energy watchdog said it would fine SSE for "numerous breaches of its obligations relating to telephone, in-store and doorstep sales activities".
A report by Ofgem said it found failures within SSE at "every stage" of the sales process and management failures which led to "prolonged and extensive misselling".
The fine is largest ever imposed on an energy supplier in the UK.
Ofgem says insufficient attention was paid to ensuring compliance with obligations at SSE, meaning customers were fed misleading and unsubstantiated statements about savings that could be made.
It also found failing at "all stages of SSE’s sales processes", from the opening sales pitches on potential customers' doorsteps, in-store or over the phone, right through to the confirmation process which follows a sale.
Although SSE terminated doorstep sales in July 2011, Ofgem says failures in telephone and in-store sales persisted.
Sarah Harrison, Ofgem’s senior partner in charge of enforcement, said: "In order to restore trust in the energy market, suppliers must comply with their obligations and play it straight with consumers. Ofgem’s findings show SSE failed its customers, missold to them and undermined trust in the energy supply industry.
"These failings did not just take place on the doorstep but also in the management of SSE. Ofgem’s fine reflects an absence of effective management control over energy selling.
"Today’s fine sends a clear message to suppliers that Ofgem will hold to account those companies which fail to treat consumers fairly. It is time for the energy industry to take note and get behind Ofgem’s reforms to rebuild trust and make the market simpler, clearer and fairer for consumers."
Ofgem said it does not possess powers to oblige companies to award consumer compensation, but it has argued for powers of redress.
It says the government is backing its call by providing new powers in the Energy Bill.
SSE now has a £5m mis-selling fund, where customers can receive compensation if they have been the victims of mis-selling.
Customers can contact the fund via the dedicated line on 0845 0707 388.
(IT/CD)
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