SSE, the parent company of energy firm SWALEC, has been fined a record £10.5 million by regulator Ofgem for mis-selling.
The fine is the largest ever imposed on an energy supplier by Ofgem.
The regulator said it found failures at every stage of SSE’s sales process and that management failures led to prolonged and extensive mis-selling.
Ofgem found that a failure of SSE’s management arrangements meant that insufficient attention was paid to ensuring compliance with obligations. This enabled misleading and unsubstantiated statements to be made by sales agents to potential customers about savings.
It also found failings at all stages of SSE’s sales processes, from the opening lines on the doorstep, in-store or over the phone through to the confirmation process which followed a sale.
Sarah Harrison, Ofgem’s Senior Partner in charge of enforcement said: “In order to restore trust in the energy market suppliers must comply with their obligations and play it straight with consumers. Ofgem’s findings show SSE failed its customers, missold to them and undermined trust in the energy supply industry.
“These failings did not just take place on the doorstep but also in the management of SSE. Ofgem’s fine reflects an absence of effective management control over energy selling.
“Today’s fine sends a clear message to suppliers that Ofgem will hold to account those companies which fail to treat consumers fairly. It is time for the energy industry to take note and get behind Ofgem’s reforms to rebuild trust and make the market simpler, clearer and fairer for consumers.”
Ofgem does not yet have powers to require companies to award consumer compensation but it has lobbied the UK Government and it will be granted new powers in the Energy Bill.
SSE has in place a £5 million mis-selling fund, where customers can receive compensation if they have been mis-sold to.
Ofgem is encouraging anyone who believes they have been mis-sold to by
SSE to call the fund’s dedicated line on 0845 0707 388.
William Morris, managing director of retail at SSE added: “It has been clear to me from my first day at the company that everyone at SSE is deeply regretful of the way in which we failed to manage and monitor some sales activities, particularly between 2009 and 2011, when, unacceptably, standards slipped below the high levels all customers should be able to expect. During the period in question we worked hard to offer competitive prices and carve out an industry-leading position on customer service. We did not, however, spend enough time monitoring our sales processes. That meant we did not always sell in the right way, and we let some customers down.
“When I joined SSE, it was clear that efforts to put things right were well under way. Existing and potential customers can rest assured that we now have the systems, procedures, staff, training and auditing in place to ensure that they will not be let down again.”