Energy regulator Ofgem showed its commitment to a market shakedown by confirming it would look into a “potentially misleading” claim by Scottish Power that consumers could save money, despite recently raising its prices.
The energy giant had advertised a £459 savings claim from its ‘Direct October 2012′ offer. Earlier this month, however, they introduced record-breaking price rises to their customers’ electricity and gas bills.
Speaking on the BBC’s 5Live this morning Ofgem boss Alistair Buchanan said they would invoke the Enterprise Act to investigate: “We’re very concerned about some of the terms and conditions they offered consumers, particularly with one package, where it would appear savings available aren’t quite as good as the headlines suggest.”
Speaking to MPs later this morning at the Energy Select Committee Mr Buchanan said it was worrying Scottish Power gave no reason for their price rises and that they should explain their actions to their customers. MPs at the hearing said they felt dismay over Scottish Power’s price rises.
Mr Buchanan said: “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. Companies that fail to play it straight with consumers need to understand that they risk facing enforcement action.”
Scottish Power is also under investigation to see whether the difference between their Standard Credit and Direct Debit tariffs are cost reflective and, along with EDF Energy, npower, and SSE, as to whether the company has missold energy to customers.