Gas and electricity Updated:
British Gas, one of the big six energy companies, has mis-sold deals to potential customers by exaggerating the savings that could be made by switching, industry regulator Ofgem has said.
The regulator found that British Gas sales staff didn't make accurate comparisons between other suppliers' tariffs and their own – such as comparing monthly direct debit with quarterly payment methods to produce inaccurate savings estimates – resulting in overblown claims being made about the benefits of switching. In some cases sales staff told customers that they'd save money by switching, when in reality they paid more than if they'd have stayed with their current supplier.
The offences took place between February 2011 and March 2013 and involved sales staff working in Westfield shopping centre and at Sainsbury's stores across the country. A compensation package totalling £1 million has been secured by the regulator as a result, made up of £566,000 in direct compensation to affected customers and a further £434,000 to help vulnerable customers via the British Gas Energy Trust.
British Gas has already identified and contacted 4,300 customers who were potentially mis-sold to, giving them an average payment of £130 each. An additional 1,300 ex-customers were unable to be contacted, however the compensation due makes up part of the trust fund.
British Gas first identified the issue in April 2013. It immediately reported it to Ofgem and took action to correct the problems, and this prompt action meant Ofgem was happy to accept the compensation package rather than open a formal investigation.
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. [It] 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."
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