Ofgem just handed its largest-ever fine to E.On for 'extensive' energy mis-selling

Another day, another energy supplier is fined for dodgy sales practices. Although this £12m fine might be its last, Ofgem hinted.

by Emma Haslett
Last Updated: 11 Aug 2014

Blimey. It’s been a while since the last moral panic about an energy provider – so presumably we were due one. And lo, it came to pass: energy company E.On has been slapped with a £12m fine by regulator Ofgem for ‘extensive poor sales practices’.

This is the biggest fine ever handed out to an energy company for mis-selling: the last one was just over a year ago, when Scottish and Southern Energy had to pay £10.5m. So energy mis-selling is the story that keeps on taking: E.On reckons just paying out compensation to its customers will cost it between £3m and £8m, on top of the penalty.

The mis-selling took place between June 2010 and December 2013, and involved both sales and doorstep staff. It’s a familiar story: a salesman tells a frail old lady she can save money when in reality some of the tariffs sold were actually more expensive.

The list of accusations is long and damning: failing to monitor its staff, providing incorrect information to customers, failing in its ‘management arrangements’, not taking enough notice of energy sales rules, etc etc. So no wonder Tony Cocker, the company’s chief executive, was in maximum sackcloth-and-ash mode.

‘I am personally absolutely devastated by this, and I’m sure my colleagues across the country are equally devastated,’ he groveled to the BBC.  

The good news, for the 330,000 customers who receive the Warm Home Discount, is that the fine will go directly to them, in the form of a £35 payment (which should keep the heating going for 20 minutes or so). The company will also write to another 465,000 to advise them of what to do.

Having doled out £39m in mis-selling fines over the past four years, Ofgem’s Sarah Harrison suggested this might be the time to ‘draw a line under past supplier bad behaviour’. So presumably E.On’s rivals are hoping they’ll finally catch a break. Considering the government’s recent pitchfork-wielding past, we wouldn’t hold our breath…

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