Power giant E.ON fined £12 mn for misselling
19 May 2014
Power giants E.ON had been ordered by regulators to pay a fine of £12million by way of punishment for three years of dodgy sales practices.
According to Ofgem, customers were given wrong information by phone and doorstep sellers as E.ON had failed to train staff properly or keep proper checks on agency workers.
People therefore ended up signing for tariffs that were not the best for them, which continued between June 2010 and December 2013.
E.ON had thus become the latest of the Big Six energy firms to be forced to pay out millions over their sales tactics.
Npower had in December, promised to pay £3.5million to customers.
ScottishPower paid out £8.5million last year while EDF paid £4.5million in 2012.
E.ON would give £35 each to 330,000 customers who got the Warm Home Discount, as also compensate vulnerable customers who might have suffered due to the company's poor sales practices.
According to chief executive Tony Cocker, the failures were ''completely unacceptable.'' However, he added, there was no organised attempt to mislead.''
According to Lib Dem energy secretary Ed Davey, the coalition had passed the laws that allowed Ofgem to get tough.
Investigators found '' extensive poor sales practices'' amongst staff selling on the doorstep and by phone.
The company has estimated, the bill for compensation payments would likely work out to between £3million and £8 milllion, in addition to the £12 million 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.
Accepting full responsibility for the failings, he told the BBC he would, however not be resigning as a result.
His bonus, though, for the year to 2013 would be cut by "around 25%", resulting in a payment of £510,232.
From the earliest days of retail energy competition, when households received choice of their energy supplier, consumer groups had warned about sharp practices and pressure selling techniques.
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