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SSE fined record £10.5m by Ofgem SSE fined record £10.5m by Ofgem
(35 minutes later)
Energy supplier SSE has been fined £10.5m by the regulator Ofgem for mis-selling gas and electricity.Energy supplier SSE has been fined £10.5m by the regulator Ofgem for mis-selling gas and electricity.
The fine is the largest ever imposed on an energy supplier by Ofgem.The fine is the largest ever imposed on an energy supplier by Ofgem.
Ofgem said SSE, formerly known as Scottish and Southern Energy, was guilty of management failures that led to "prolonged and extensive" mis-selling. In its statement, Ofgem said SSE, formerly known as Scottish and Southern Energy, was guilty of management failures that led to "prolonged and extensive" mis-selling.
The mis-selling relates to telephone, in-store and doorstep sales, the regulator said. SSE said it was "deeply regretful" about the mis-selling, and apologised to its customers.
The mis-selling relates to telephone, in-store and doorstep sales, Ofgem said.
It said customers contacted by SSE were exposed to misleading statements, inaccurate and misleading information on SSE's charges, and misleading comparisons between SSE's charges and costs of other suppliers.It said customers contacted by SSE were exposed to misleading statements, inaccurate and misleading information on SSE's charges, and misleading comparisons between SSE's charges and costs of other suppliers.
Some customers were told they would save money when in fact they were switched onto a more expensive contract.Some customers were told they would save money when in fact they were switched onto a more expensive contract.
SSE stopped doorstep sales in 2011, but mis-selling continued in stores and over the phone.
Ofgem said the fine reflected the severity and duration of the breaches.
'Clear message''Clear message'
"Ofgem's findings show SSE failed its customers, mis-sold to them and undermined trust in the energy supply industry," said Sarah Harrison, Ofgem's senior partner in charge of enforcement."Ofgem's findings show SSE failed its customers, mis-sold to them and undermined trust in the energy supply industry," said Sarah Harrison, Ofgem's senior partner in charge of enforcement.
"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.""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."
She said the fine sent a "clear message" to energy suppliers who failed to treat customers fairly.She said the fine sent a "clear message" to energy suppliers who failed to treat customers fairly.
It is the second of four mis-selling cases that were launched by Ofgem in 2010. Ofgem told the BBC the fine would be paid to the Treasury, as the regulator does not have the power to force energy companies to reimburse customers.
However, SSE has created a £5m mis-selling fund from which affected customers can receive compensation.
The company told the BBC that it had sent out nearly a million letters about this since early last year, and had so far paid out £400,000.
The SSE case is the second of four mis-selling cases that were launched by Ofgem in 2010.
In March 2012, EDF Energy agreed to pay £4.5m pounds to vulnerable customers following breaches to marketing rules.In March 2012, EDF Energy agreed to pay £4.5m pounds to vulnerable customers following breaches to marketing rules.
Investigations into Scottish Power and Npower are continuing. Investigations into Scottish Power, Npower and E.on are continuing.