Gas and electricity Updated:
Npower has agreed to pay a total of £3.5 million to its most vulnerable customers, after an investigation by Ofgem found serious failings in the firm's sales processes and clear breaches of its marketing licence.
The investigation focused on Npower's sales tactics and the information used when encouraging customers to switch suppliers. It was found that they breached several rules regarding doorstep and over the phone selling, including failing to get sufficient information about a customer's current consumption to enable them to make an informed decision, and even basing price comparisons on tariffs that the customer wasn't currently signed up to.
This form of mis-selling came at a time when Npower was reviewing its sales processes, and the company has admitted their practices failed to live up to the standards expected by Ofgem. As a result, they've pledged to make a payment of at least £25 to all customers who are Warm Home Discount payment recipients, totalling a £3.5m package to help struggling families.
"Npower has done the right thing by stepping forward and recognising that, whilst it was making changes to improve its sales processes, weaknesses remained which affected consumers' ability to compare supplier offers fairly.
"These issues have been fully addressed by Npower and Ofgem welcomes the company's actions and its agreement to pay £3.5m to directly benefit vulnerable consumers."
Npower has said all processes have been adequately changed and all shortcomings remedied, with the issues having ceased by September 2012.
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