In the latest scandal to hit the UK Energy sector, British Gas has agreed to pay £1m to customers who were mis-sold energy deals. The compensation package was secured by Ofgem, a regulatory body responsible for monitoring the UK’s gas industry.
British Gas has admitted 5,600 customers were possibly mis-sold energy packages between February 2011 and March 2013.
The energy firm’s staff misquoted savings customers could make from switching to their tariffs, according to the regulator. Inflated savings estimates were issued to prospective customers in Sainsbury’s stores and London’s Westfield shopping centre.
To date, British Gas has paid £559,000 to potentially affected customers. The firm has also channelled a modest £434,000 to vulnerable customers via a charitable trust it funds.
Ofgem has waived a formal investigation into the energy giant’s misconduct. It cited the company’s “prompt action” and recently administered compensation as core motivations for the decision.
On July 4th, RT asked Ofgem whether it suspected Britain’s energy suppliers of further misconduct. RT’s Ofgem source stated the body is determined to maintain a “close eye” on energy companies’ adherence to regulatory obligations. He went on to emphasise Ofgem’s “strong record” of addressing regulatory breaches within the UK energy market.
“Since April 2010 Ofgem has required energy companies to pay out more than £100 million in fines and redress payments, as a result of our enforcement action”, he concluded.
Curious as to when British Gas’ upper management discovered its staff had misled customers, RT called the firm’s press office on Friday. Despite numerous attempts to reach an official spokesperson there, the line remained unattended.
British Gas is the latest of Britain’s big energy suppliers to be tainted by reports of mis-selling. Reflecting on misconduct within the energy sector, a senior enforcement official at Ofgem said:
“Ofgem expects all suppliers to put this poor behaviour behind them and really start acting in a way that will help consumers trust energy suppliers. Where they don’t, Ofgem will act.”
According to uSwitch, an impartial organisation that compares UK energy firms, 20% of British households were billed inaccurately by energy suppliers in 2013. This has further stoked the ire of consumers facing inreased bills at a time when the price the energy companies are paying for the gas is falling.