ScottishPower to pay £8.5m for misleading customers

Energy supplier ScottishPower has agreed to pay £8.5 million in total after Ofgem found customers were misled by the company’s doorstep and telesales agents. The energy regulator’s investigation into the […]

By Priyanka Shrestha

Energy supplier ScottishPower has agreed to pay £8.5 million in total after Ofgem found customers were misled by the company’s doorstep and telesales agents.

The energy regulator’s investigation into the power firm’s sales approaches between October 2009 and January 2012 found it did not have “appropriate management arrangements to adequately train and monitor” staff. This resulted in misleading information being provided to consumers, Ofgem said.

Earlier this year, Ofgem also fined SSE a record £10.5 million for several similar breaches.

ScottishPower will pay £7.5 million to more than 140,000 “vulnerable customers” on the Warm Home Discount scheme, each of whom will receive around £50. A further £1 million will be allocated to a fund for customers who believe they may have been mis-sold to.

Sarah Harrison, Ofgem’s Senior Partner in charge of enforcement said: “Ofgem welcomes ScottishPower’s recognition of its failure to comply with the energy sales rules which are there to protect the consumer. This is an important step forward and demonstrates a commitment by ScottishPower towards re-establishing consumer trust.

“Today’s announcement is a clear signal to energy suppliers of the consequences of breaching licence obligations and of the importance of taking action to put things right for consumers when they go wrong.”

Ofgem said the failings had now all been rectified and ScottishPower stopped doorstep sales in 2011 and has also put in place independent checks on the conduct of its telephone agents.

The energy supplier said it “apologises unreservedly” to the customers affected.

Neil Clitheroe, ScottishPower’s CEO of Energy Retail and Generation added: “This arose as a result of new regulations which were introduced in 2009. I am sorry to say that we didn’t implement these properly at that time. However, I am pleased that Ofgem has made it clear that they found no evidence of a strategy by ScottishPower to deliberately mis-sell to customers.”

The energy firm will send an explanatory letter to all affected customers and the payments will be made by the end of the year. Mr Clitheroe today confirmed ScottishPower will be increasing energy prices “at some point this year”.