UK

Energy Giant SSE Fined £10.5m For Mis-Selling

03/04/2013 11:26 BST | Updated 03/04/2013 15:33 BST

One of Britain's biggest energy suppliers has apologised "unreservedly" to customers after learning it is to be fined a record £10.5 million for "prolonged and extensive" mis-selling.

SSE, formerly known as Scottish and Southern Energy, was accused of "failures at every stage of the sales process" across its telephone, in-store and doorstep selling activities.

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Customers were misled about potential savings

The company provided "misleading and unsubstantiated statements" to potential customers about prices and savings that could be made by switching to SSE, according to Ofgem, the industry watchdog.

Asked why nobody had resigned or been sacked, Alan Young, the company's Managing Director, Corporate Affairs, told Sky News: "We have a team approach".

Ofgem said the fine reflected the seriousness and the duration of the mis-selling, as well as the harm caused to customers and the likely gain to the company.

Management at SSE - one of Britain's "big six" energy suppliers - failed to pay enough attention to compliance, which allowed the mis-selling to take place, added Ofgem.

Ian Marlee, managing director for markets at Ofgem, told the BBC Radio 4 Today programme: "This is a woeful catalogue of failures by the SSE management.

"This fine represents the fact that what they were doing was allowing a culture of mis-selling to continue, they weren't doing enough to prevent sharp selling practices from their selling agents, they actually provided misleading sales scripts.

"Some people were being told they were going to get savings when actually they were being put on a worse deal.

"People were expecting savings and were not getting the levels of savings, people were being told direct debit levels

that made it sound like they were going to be better off when in fact they were worse off.

"What we need and what we expect from energy companies is they have a culture of putting consumers first and complying with the rules.

"Clearly SSE management were not doing that which is why we imposed the largest fine on energy suppliers we have ever imposed."

SSE, which has around 10 million domestic customers in the UK, stopped doorstep selling in July 2011, but Ofgem said failures continued over the telephone and in store.

SSE said it was "deeply regretful that breaches occurred and apologises unreservedly to any customers who have been affected by sales activity which ran counter to the values and culture of the company".

Bonuses were withheld for its three executive directors in 2012 as a result of the mis-selling breaches, it added.