This article is from the source 'guardian' and was first published or seen on . It last changed over 40 days ago and won't be checked again for changes.
You can find the current article at its original source at http://www.guardian.co.uk/money/2013/apr/03/sse-customers-compensation-ofgem-fine
The article has changed 3 times. There is an RSS feed of changes available.
| Version 1 | Version 2 |
|---|---|
| SSE customers urged to seek compensation after Ofgem fine | SSE customers urged to seek compensation after Ofgem fine |
| (6 months later) | |
| More than 20,000 customers who bought gas or electricity from the energy company SSE have been urged to contact the firm for compensation, after the energy regulator Ofgem uncovered evidence of "prolonged and extensive" mis-selling. | More than 20,000 customers who bought gas or electricity from the energy company SSE have been urged to contact the firm for compensation, after the energy regulator Ofgem uncovered evidence of "prolonged and extensive" mis-selling. |
| SSE has been fined £10.5m, the largest ever penalty imposed on an energy provider, after the watchdog found that sales staff had used misleading scripts to encourage people to switch their accounts to the company. | SSE has been fined £10.5m, the largest ever penalty imposed on an energy provider, after the watchdog found that sales staff had used misleading scripts to encourage people to switch their accounts to the company. |
| The mis-selling included customers being told they would save money by switching to SSE, only to find their bills went up as a result. In one case cited by Ofgem, a woman who was promised a £177 saving if she signed up with the firm actually saw her bills increase by £134 a year. | The mis-selling included customers being told they would save money by switching to SSE, only to find their bills went up as a result. In one case cited by Ofgem, a woman who was promised a £177 saving if she signed up with the firm actually saw her bills increase by £134 a year. |
| The examples found in Ofgem's latest investigation of SSE, which supplies electricity to about 5 million customers and gas to 3.4 million customers in the UK, appear to contain some of the most audacious breaches of sales rules and customer care ever recorded. In an example from one doorstep script used in the north of England, the salesperson was recorded as saying: "What I'm here to do today is show you a government thing called deregulation which results in your energy prices being lowered by doing nothing at all." | The examples found in Ofgem's latest investigation of SSE, which supplies electricity to about 5 million customers and gas to 3.4 million customers in the UK, appear to contain some of the most audacious breaches of sales rules and customer care ever recorded. In an example from one doorstep script used in the north of England, the salesperson was recorded as saying: "What I'm here to do today is show you a government thing called deregulation which results in your energy prices being lowered by doing nothing at all." |
| The statement was inaccurate and misleading as there was no automatic reduction in energy prices owing to "a government thing called deregulation" or by the customer "doing nothing at all", said Ofgem. | The statement was inaccurate and misleading as there was no automatic reduction in energy prices owing to "a government thing called deregulation" or by the customer "doing nothing at all", said Ofgem. |
| "They [SSE] actually provided misleading sales scripts," Ian Marlee, the managing director for markets at Ofgem, told the BBC Radio 4 Today programme. "Some people were being told they were going to get savings when actually they were being put on a worse deal. People were expecting savings and were not getting the levels of savings. People were being told direct debit levels that made it sound like they were going to be better off when in fact they were worse off." | "They [SSE] actually provided misleading sales scripts," Ian Marlee, the managing director for markets at Ofgem, told the BBC Radio 4 Today programme. "Some people were being told they were going to get savings when actually they were being put on a worse deal. People were expecting savings and were not getting the levels of savings. People were being told direct debit levels that made it sound like they were going to be better off when in fact they were worse off." |
| SSE already has a £5m fund set aside to compensate affected customers from a previous mis-selling investigation. The fund has been in place since the end of 2011, when SSE was under investigation by Ofgem for misleading doorstep selling. It was found guilty and fined £1.25m by Ofgem in May 2012. So far £400,000 of the fund has been paid out to 6,500 customers, an average £61.50 each. | SSE already has a £5m fund set aside to compensate affected customers from a previous mis-selling investigation. The fund has been in place since the end of 2011, when SSE was under investigation by Ofgem for misleading doorstep selling. It was found guilty and fined £1.25m by Ofgem in May 2012. So far £400,000 of the fund has been paid out to 6,500 customers, an average £61.50 each. |
| The new £10.5m fine by the regulator reflects a much more deeply entrenched mis-selling problem at SSE, covering failings at all stages of the energy firm's sales procedure, from the opening lines on the doorstep, in-store or over the phone, through to the confirmation process which followed a sale. | The new £10.5m fine by the regulator reflects a much more deeply entrenched mis-selling problem at SSE, covering failings at all stages of the energy firm's sales procedure, from the opening lines on the doorstep, in-store or over the phone, through to the confirmation process which followed a sale. |
| Ofgem claims that "upwards of 20,000" customers have been affected by these sales activities, which stretch back to October 2009 and is encouraging anyone who thinks they may have been affected to call SSE's dedicated claim line on 0800 975 3341. | Ofgem claims that "upwards of 20,000" customers have been affected by these sales activities, which stretch back to October 2009 and is encouraging anyone who thinks they may have been affected to call SSE's dedicated claim line on 0800 975 3341. |
| Some customers whose energy is supplied by Marks & Spencer may also be entitled to compensation, as M&S Energy's supplier is SSE. The in-store policies Ofgem refers to were those sold within M&S stores by SSE agents. Another company, Ebico, uses SSE as its supplier but Ofgem says its customers were not affected by the mis-selling. | Some customers whose energy is supplied by Marks & Spencer may also be entitled to compensation, as M&S Energy's supplier is SSE. The in-store policies Ofgem refers to were those sold within M&S stores by SSE agents. Another company, Ebico, uses SSE as its supplier but Ofgem says its customers were not affected by the mis-selling. |
| Examples of mis-selling tactics included customers being led to believe: | Examples of mis-selling tactics included customers being led to believe: |
| • they would save money when in fact they were switched on to a more expensive contract | • they would save money when in fact they were switched on to a more expensive contract |
| • they could make larger savings if they switched to SSE than were possible | • they could make larger savings if they switched to SSE than were possible |
| • by switching to SSE they would be getting the full reductions they were entitled to, "just like the government intended" | • by switching to SSE they would be getting the full reductions they were entitled to, "just like the government intended" |
| • other suppliers were making "all sorts of false promises" | • other suppliers were making "all sorts of false promises" |
| • other suppliers were putting their prices up, or that other suppliers' price increases were higher than they actually were | • other suppliers were putting their prices up, or that other suppliers' price increases were higher than they actually were |
| • that SSE could put them on a "preferred customer tariff … with no standing charge", omitting the fact that those customers would be charged higher first tier unit rates instead of a standing charge. | • that SSE could put them on a "preferred customer tariff … with no standing charge", omitting the fact that those customers would be charged higher first tier unit rates instead of a standing charge. |
| SSE's management was also found to have made serious failings in its processes including providing misleading scripts to its telesales staf and failing to check whether estimates of SSE charges and comparisons with the charges of competitors were accurate. | SSE's management was also found to have made serious failings in its processes including providing misleading scripts to its telesales staf and failing to check whether estimates of SSE charges and comparisons with the charges of competitors were accurate. |
| William Morris, a managing director at SSE, said the company was "deeply regretful of the way in which we failed to manage and monitor some sales activities" and added that "standards slipped below the high levels all customers should be able to expect." | William Morris, a managing director at SSE, said the company was "deeply regretful of the way in which we failed to manage and monitor some sales activities" and added that "standards slipped below the high levels all customers should be able to expect." |
| All of the £10.5 million fine will end up with the Treasury as Ofgem lacks the powers to make companies award compensation to the affected consumers. | All of the £10.5 million fine will end up with the Treasury as Ofgem lacks the powers to make companies award compensation to the affected consumers. |
| Although the fine is the biggest imposed on any energy company to date, it is not the first. In 2012, EDF agreed to pay £4.5m back to its customers following an investigation by Ofgem that found it had made misleading sales claims to customers. Ofgem agreed that EDF could distribute £3.5m among its most vulnerable customers and give £1m to Citizen's Advice. | Although the fine is the biggest imposed on any energy company to date, it is not the first. In 2012, EDF agreed to pay £4.5m back to its customers following an investigation by Ofgem that found it had made misleading sales claims to customers. Ofgem agreed that EDF could distribute £3.5m among its most vulnerable customers and give £1m to Citizen's Advice. |
| Investigations into Scottish Power, npower and E.ON are continuing. | Investigations into Scottish Power, npower and E.ON are continuing. |
| Richard Lloyd, executive director of consumer group Which?, described SSE's practices as "completely unacceptable". | Richard Lloyd, executive director of consumer group Which?, described SSE's practices as "completely unacceptable". |
| "With scandals like this it's no wonder that less than a quarter of people say they trust energy companies," he said. | "With scandals like this it's no wonder that less than a quarter of people say they trust energy companies," he said. |
| Our editors' picks for the day's top news and commentary delivered to your inbox each morning. |