EDF Energy agrees to pay £4.5m 'fine'

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Energy supplier EDF has agreed to pay a package worth £4.5m - including £3.5m to customers - after an Ofgem investigation found it had breached its marketing licence conditions.

The payment, imposed by the regulator Ofgem, is the biggest of its kind.

It will see £50 paid into 70,000 accounts of what EDF describes as its "most vulnerable customers".

EDF denied that the amount was a fine or penalty - although the total of £4.5m includes a £1 penalty.

It also includes £1m that the company will pay into a fund run by the Citizen's Advice to raise awareness among customers on how to get the best energy tariff.

Ofgem found that EDF had breached some aspects of the licences governing the information it gives when selling to customers.

It also said that telesales agents sometimes made opening statements in their calls to customers that claimed it could offer savings before they knew the actual circumstances of the customer they were calling.

Ofgem also said it was continuing its investigations into EDF's rivals Scottish Power, Scottish and Southern Energy, and Npower.

<strong>'The right thing'</strong>

Ofgem said customers were not always given complete information on matters including contract terms and the way their direct debits or annual consumption was calculated.

"EDF Energy has done the right thing by stepping forward and recognising there were weaknesses in its sales processes," said Sarah Harrison, Ofgem's senior partner in charge of enforcement.

"The firm also took the initiative to correct these problems during Ofgem's investigation."

And the energy supplier said that its moves were important to restoring "customer trust".

"EDF Energy has engaged in a constructive dialogue about shortcomings in the firm's sales processes and has taken a proactive approach to addressing those shortcomings," the firm said.

Ofgem also said that its ongoing investigations into other suppliers did not mean that they have made similar breaches.

"For the avoidance of doubt, the fact that Ofgem continues these investigations should not be taken as implying that any supplier has breached its obligations."