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Scottish Power faces investigation from Ofgem

Scottish Power faces investigation from Ofgem

Category: Gas and electricity

Updated: 22/06/2011
First Published: 22/06/2011

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

Scottish Power faces an investigation from the energy watchdog over a 'potentially misleading' offer it made in the wake of 19% price rises.

Ofgem will look at the accuracy of Scottish Power's claim that its 'Direct October 2012' offer would guarantee prices would remain
1% below standard monthly direct debit prices until
30 September 2012.

The firm is also being probed, along with EDF Energy, npower and Scottish and Southern Energy (SSE), to find out whether it missold energy to customers.

The offer came after Scottish Power announced it would be hiking its gas prices by 19% and its electricity prices by 10%, a move that will affect 2.4 million households in the UK .

Scottish Power blamed the rises on significant increases in the wholesales cost of energy.

"Our new investigation into potentially misleading marketing by Scottish Power is a further strong signal to the industry that we wish to see a sea change in the way customers are treated," said Alistair Buchanan, chief executive of Ofgem.

"Companies that fail to play it straight with consumers need to understand that they risk facing enforcement action."

The energy regulator has also said it is to press ahead with its attempts to overhaul the retail gas and electricity market, with the 'big six' all signed up to take part in the process.

Ofgem is pressing for firms to simplify their tariffs so they are clearer for consumers.

The regulator has also signalled its intention to breakup the stranglehold on the market that British Gas, npower, E.ON Energy, EDF Energy, Scottish Power and SSE currently enjoy.

"(We will) encourage more firms, like the new arrival of Co-op, to enter the energy market and increase the competitive pressure on the big six," said Mr Buchanan.

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