British Gas to pay £1million in compensation for mis-selling to customers
Energy providers are already public enemy number one, and now Ofgem has underlined the point by allowing British Gas to pay out a total of £1million in compensation to people it mis-sold its energy to. You might wonder how energy can be mis-sold, after all, you will actually get gas and electricity from them. However, the offences in question concern salespeople lying about ‘exaggerating’ the amount of savings that could be earned by switching to British Gas.
The mis-selling took place in Sainsbury’s stores nationwide and in Westfield shopping centre, Shepherds Bush. In addition, staff and branding in Sainsbury’s stores did not make clear that British Gas was the supply partner for Sainsbury’s Energy, thereby fooling all those who already had an axe to grind with British Gas.
Ofgem has today revealed that, between February 2011 and March 2013, British Gas staff in Sainsbury’s stores and Westfield shopping centre made exaggerated savings claims to prospective customers. It seems some unscrupulous sales staff did not compare tariffs on a like for like basis, even going so far as to compare monthly direct debit payments with quarterly payment methods to produce inaccurate savings estimates. This shocking underhandedness meant that, unsurprisingly, some customers were told that they would save money by switching, but in fact they paid more with Sainsbury’s Energy or British Gas than they would have paid if they had remained with their current supplier.
To be fair to British Gas, they identified the issue and voluntarily reported it to Ofgem in April 2013, taking immediate action to correct the issues. Ofgem therefore decided to accept British Gas’ compensatory offer in lieu of opening a formal investigation.
British Gas has identified customers who were potentially mis-sold to and has made an average payment of £130 to 4,300 affected customers. It was unable to contact around 1,300 ex-customers, so £434,000 in compensation will be paid to the British Gas Energy Trust to directly benefit customers. Rather than the ex-customers who got shafted.
Sarah Harrison, Senior Partner in charge of enforcement said: “Ofgem welcomes British Gas’ action to tackle its sales failures and compensate customers quickly when it became aware of mis-selling. 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.” Or sometimes, Ofgem will allow energy companies to define their own crimes and decide their own punishment…