Ofgem burns SSE with its largest ever fine

The firm formerly known as Scottish and Southern Energy has been fined £10.5m by Ofgem over 'prolonged and extensive' mis-selling to its customers.

by Michael Northcott
Last Updated: 19 Aug 2013

A real stinger for SSE this morning, as it discovered that the energy industry watchdog has slapped it with the largest ever fine on a British energy supplier. Ofgem said the energy firm was guilty of ‘numerous breaches of its obligations relating to telephone, in-store and doorstep sales activities.’

It justified the size of the fine saying that it accurately ‘reflected the seriousness and duration of the breaches’, the ‘likely substantial harm that they have caused and the likely gain to SSE’.  

So what exactly was SSE up to? Here are some examples: 

Telling some customers that they would save money when they in fact ended up being moved onto a pricier deal;

Telling some customers that they would make larger savings than were actually possible if they switched to SSE;

Telling a customer that if they switched to SSE they would get all the reductions that are available ‘just like thegovernment intended';

Telling a customer that other suppliers were making ‘all sorts of false promises’.

Other criticisms involved telesales staff not providing enough information on exit/cancellation fees, actual unit rates and standing charges associated with being on an SSE contract. 

So, some pretty brazen foul play here. In recompense, the firm has created a mis-selling fund worth £5m that will soon begin doling out compensation to the customers affected. But it is possible that many customers will not know whether they have been diddled or not.

To put the fine in perspective, in SSE's most recent financial results, it announced profits of almost £400m for the six months to the end of September 2012. It's fair to say that a £10m fine will hardly touch the sides.

Given the rising costs of energy for households across the UK, this is another nail in the coffin for the reputation of the ‘Big Six’…

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