Scottish Power has been fined £8.5 million after Ofgem found them guilty of mis-selling both on the doorstep and over the telephone.
The regulator said that Scottish Power had misled consumers during sales approaches because of the company’s failure to ‘adequately train and monitor’ its staff.
Fuel poverty
The company is to pay £7.5 million to the 140,000 customers it has on the government-led ‘warm home discount scheme’ which is aimed at supporting consumers who are felt most likely to be at risk of fuel poverty. Each customer should receive around £50.
The regulator has also ordered Scottish Power to set up a £1 million contingency fund to pay compensation to customers who believe they were mis-sold to between 2009 and 2012 when sales staff were trying to persuade consumers to switch from their current supplier and sign up with Scottish Power.
Enforcement
Sarah Harrison, head of Ofgem’s enforcement section, says: “This announcement is a clear signal to energy suppliers of the consequences of breaching licence obligations.”
Scottish Power says all of the failings identified during the investigation have now been rectified. They stopped doorstep selling in 2011 and has put independent checks in place for their telephone selling operation.
Compensation
They are to write to the 336,000 people who may have been affected and could be in line for some of the £1 million compensation pot.
Spokesman Neil Clitheroe says: “We accept Ofgem’s findings and apologise unreservedly to those customers affected. The problems arose from new regulations introduced in 2009 and I am sorry we didn’t implement these properly at the time.”
Guilty
Scottish Power is not the only supplier to be fined by Ofgem for doorstep selling. In April SSE was found guilty of management failures which led to ‘prolonged and extensive’ mis-selling through telephone, store and doorstep sales. The regulator fined them a record £10.5 million.
Investigations into E-on and Npower are on-going.
New changes
New changes in the rules have just come into force aimed at consumers getting the best energy deal for them.
Ofgem chief executive Andrew Wright says: “Ofgem is going to make it easier for consumers to ‘vote with their feet’. Our new rules seek to give consumers the tools they need to find the best energy deal for them.”
Energy firms can no longer increase prices during fixed term contracts and are banned from rolling customers onto another fixed term offer when their current one ends.
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