UK energy regulator fines SSE for mis-selling

Britain's energy regulator said it had fined gas and electricity supplier SSE £10.5 million for mis-selling, the largest fine it has ever imposed on an energy supplier.

In a strongly worded statement, Ofgem said it had found failures relating to telephone, in-store and doorstep sales "at every stage of the process", including at the management level.

"The level of fine reflects the seriousness and duration of breaches, the likely substantial harm that they have caused and the likely gain to SSE," said the regulator.

Ofgem said SSE - which provides gas, electricity, phone and broadband for households - had made misleading and inaccurate statements to customers in order to make a sale. Examples it gave included telling customers they would save money but switching them to a more expensive contract and telling them competitor price increases were higher than they actually were.

Although SSE's management had not wilfully breached licence conditions, the board paid insufficient attention to compliance and it was not a high priority for it, Ofgem said.

The regulator launched investigations into selling practices by SSE, EDF, RWE's npower and Ibedrola's Scottish Power in 2010, and by E.ON in 2012. Last year, EDF paid out £4.5 million to help vulnerable consumers after Ofgem found it had breached some licence conditions in its sales and marketing.

The investigations into npower and Scottish Power are ongoing.

"SSE is deeply regretful that breaches occurred and apologises unreservedly to any customers who have been affected by sales activity which ran counter to the values and culture of the company," SSE said.

It said it had already taken action to remedy the issues raised, including stopping doorstep selling, bringing telesales in-house, and training and restructuring.

SSE has already been fined £1.25 million for doorstep mis-selling by the courts. It has earmarked £5 million to reimburse customers who felt they have been misled. It has paid out around £400,000 of this so far.

Reuters