Gas and electricity Updated:
EDF Energy has agreed to pay out £4.5 million after an investigation by Ofgem found the firm breached rules.
The package will see £3.5 million given to vulnerable customers, with another £1 million donated to support a Citizen's Advice campaign to help people find the best energy deal.
The agreement will see £50 credit paid to 70,000 of EDF's most vulnerable customers who are eligible for the Warm Home Discount.
It is the biggest payment of its kind which has been enforced by Ofgem, although EDF Energy has denied that the £4.5 million is a fine.
An investigation by the energy watchdog into the firm's sales and marketing found that customer were not always given full details on contract lengths, how direct debits were worked out and how estimates were calculated.
In addition, EDF Energy telesales staff sometimes made statements at the start of a phonecall without knowing whether they were accurate.
For example, some staff told customers they could help them save money on their bills without knowing if that were the case, while others assumed that people were on standard tariffs without checking.
"We're obviously disappointed that we failed to live up to the high standards that we expect of ourselves," said Martin Lawrence, Managing director, Energy Sourcing & Customer Supply at EDF Energy.
"As soon as the issue was identified we immediately took action to satisfy ourselves that we're fully compliant. We want people to be confident that, when they buy from EDF Energy, they are getting fair prices and consistently clear and simple information."
Ofgem said that without taking the appropriate action to change its sales processes, the firm would have faced a higher package of payments.
"EDF Energy has done the right thing by stepping forward and recognising there were weaknesses in its sales processes," said Sarah Harrison, Ofgem's Senior Partner in charge of enforcement.
"The firm also took the initiative to correct these problems during Ofgem's investigation. This is an important step forward and demonstrates a commitment by EDF Energy towards re-establishing consumer trust which we welcome."
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