This article is from the source 'bbc' 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.bbc.co.uk/news/business-27433428

The article has changed 11 times. There is an RSS feed of changes available.

Version 2 Version 3
E.On energy supplier to pay record £12m mis-selling penalty E.On energy supplier to pay record £12m mis-selling penalty
(about 1 hour later)
Energy giant E.On is to pay a record £12m penalty following an investigation into mis-selling by the industry regulator. Energy giant E.On is to pay a record £12m penalty, following an investigation into mis-selling by the industry regulator.
Ofgem has carried out a series of mis-selling investigations, and in December imposed a £3.5m penalty on Npower. Ofgem said it was the largest penalty paid to date by a UK energy supplier.
Ofgem says E.On's penalty is the biggest supplier pay-out to customers, reflecting the extensive rule breaches, both on the doorstep and by telephone. Its investigation found "extensive poor sales practices" amongst staff selling on the doorstep and by phone.
The energy supplier apologised for the "completely unacceptable" failings. E.On has apologised to its customers, and has promised to pay compensation to anyone who was mis-sold an energy package.
E.On will pay around £35 to 333,000 customers who are normally recipients of the Warm Home Discount. The company has estimated that the bill for compensation payments is likely to be between £3m and £8m, on top of the £12m penalty.
It will also write to around 465,000 customers it has identified itself, informing them of how to get in touch to find out whether they were mis-sold to. ""I am personally absolutely devastated by this, and I'm sure my colleagues across the country are equally devastated" said Tony Cocker, E.On's chief executive.
Ofgem found that E.On had poor sales practices, failed to property train staff, and had insufficient safeguards. He told the BBC he took full responsibility for the failings, but would not comment on whether he might resign as a result.
The mis-selling occurred between June 2010 and December 2013. Payments
The mis-selling took place over a three-and-a-half period, between June 2010 and December 2013.
Customers were misled by sales staff, and some may have been sold more expensive tariffs than they were already on with other companies.
E.On said it had now stopped all sales on the doorstep, and all cold-calling by phone.
The £12m penalty will be distributed to 333,000 of the company's poorest customers.
Those who receive the Warm Home Discount - pensioners, disabled people and low income families - will receive £35 each, even though they were not necessarily affected by the mis-selling.
Other vulnerable customers will also receive automatic payments.
In addition, the company will be writing to 465,000 other customers to advise them how to complain if they believe they were the victims of mis-selling.
Or they can call the company directly, on 0800 0568 497.
Failures
The regulator said that E.On had opportunities to improve its sales practices long before 2013, but its response was inadequate.The regulator said that E.On had opportunities to improve its sales practices long before 2013, but its response was inadequate.
However, Ofgem said E.On had co-operated fully with its investigation, which began in 2012. In addition, Ofgem said that E.On had
No excuses
Tony Cocker, chief executive of E.On UK, said it was "completely unacceptable" that sales staff had been unclear with customers about their energy tariff choices.
He added: "There was no organised attempt to mislead, and Ofgem has acknowledged this, but that does not excuse the fact we did not have in place enough rules, checks and oversight."
Mr Cocker said E.On was completely overhauling its sales processes and had already ended doorstep sales and telephone cold calling.
Sarah Harrison, senior partner in charge of enforcement at Ofgem said: "The time is right to draw a line under past supplier bad behaviour and truly rebuild trust so consumers are put at the heart of the energy market.Sarah Harrison, senior partner in charge of enforcement at Ofgem said: "The time is right to draw a line under past supplier bad behaviour and truly rebuild trust so consumers are put at the heart of the energy market.
"E.ON has today taken a good step by accepting responsibility for its actions and putting proper redress in place.""E.ON has today taken a good step by accepting responsibility for its actions and putting proper redress in place."
The energy watchdog has imposed nearly £100m in fines and redress on energy companies for various rule breaches over the last four years, £39m of which have been for mis-selling.The energy watchdog has imposed nearly £100m in fines and redress on energy companies for various rule breaches over the last four years, £39m of which have been for mis-selling.
Have you been affected by issues covered in this story? You can email us at haveyoursay@bbc.co.uk using the subject line 'E.ON mis-selling'.Have you been affected by issues covered in this story? You can email us at haveyoursay@bbc.co.uk using the subject line 'E.ON mis-selling'.