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E.On energy supplier to pay record £12m for mis-selling E.On energy supplier to pay record £12m for mis-selling
(35 minutes later)
Energy giant E.On is to pay out £12m to some of its customers following an investigation into mis-selling by the industry regulator.Energy giant E.On is to pay out £12m to some of its customers following an investigation into mis-selling by the industry regulator.
Ofgem said it was the largest penalty paid to date by a UK energy supplier.Ofgem said it was the largest penalty paid to date by a UK energy supplier.
Its investigation found "extensive poor sales practices" amongst staff selling on the doorstep and by phone.Its investigation found "extensive poor sales practices" amongst staff selling on the doorstep and by phone.
E.On has apologised to its customers, and has promised to pay compensation to anyone who was mis-sold an energy package.E.On has apologised to its customers, and has promised to pay compensation to anyone who was mis-sold an energy package.
The company has estimated that the bill for compensation payments is likely to be between £3m and £8m, on top of the £12m penalty.The company has estimated that the bill for compensation payments is likely to be between £3m and £8m, on top of the £12m penalty.
""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.""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.
He told the BBC he took full responsibility for the failings, but would not comment on whether he might resign as a result. He told the BBC he took full responsibility for the failings, but said he would not be resigning as a result.
However he has agreed to give up his annual bonus.However he has agreed to give up his annual bonus.
PaymentsPayments
The mis-selling took place over a three-and-a-half year period, between June 2010 and December 2013.The mis-selling took place over a three-and-a-half year 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.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 was the last of the big six energy suppliers to stop doorstep selling, in September 2012.E.On was the last of the big six energy suppliers to stop doorstep selling, in September 2012.
It said it had now stopped all cold-calling by telephone as well.It said it had now stopped all cold-calling by telephone as well.
The £12m penalty will be distributed to 333,000 of the company's poorest customers.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.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.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.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.Or they can call the company directly, on 0800 0568 497.
FailuresFailures
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.
In addition, Ofgem said that E.On hadIn addition, Ofgem said that E.On had
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.
E.On was itself fined £1.7m by Ofgem in November 2012, for overcharging customers. The company blamed a computer error.E.On was itself fined £1.7m by Ofgem in November 2012, for overcharging customers. The company blamed a computer error.
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'.