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02/09/2010
Energy Suppliers Face Mis-Selling Investigation
Ofgem has launched investigations into four energy suppliers to determine if they are mis-selling and complying with new obligations.
Scottish Power, npower, Scottish and Southern Energy and EDF Energy will face an inquiry about the sales approach any suppliers have taken when selling energy contracts, either face-to-face or by telephone.
Andrew Wright, Ofgem's Senior Partner, Markets, said: "Suppliers have existing obligations to detect and prevent misselling and new licence conditions were brought in following our probe to further increase protection for customers. We expect all suppliers to comply with these tougher obligations but if our investigations find otherwise we will take strong action."
Last October Ofgem introduced tougher obligations meaning suppliers have to be proactive in preventing misselling to customers both face to face and over the phone. Also, if suppliers are selling contracts face-to-face they must provide customers with an estimate before any sales are concluded. In most circumstances customers should also receive a comparison of the supplier's offer with their current deal.
Which? Chief Executive, Peter Vicary-Smith, said: "It's shocking that Ofgem is having to investigate mis-selling by such a large slice of the UK's energy market. This will do nothing to improve consumer trust in energy suppliers.
"We're pleased that Ofgem has promised tough measures against any firms guilty of mis-selling. We hope it uses this opportunity to tighten rules around telesales so they are in line with those for face to face sales."
(CD/GK)
Scottish Power, npower, Scottish and Southern Energy and EDF Energy will face an inquiry about the sales approach any suppliers have taken when selling energy contracts, either face-to-face or by telephone.
Andrew Wright, Ofgem's Senior Partner, Markets, said: "Suppliers have existing obligations to detect and prevent misselling and new licence conditions were brought in following our probe to further increase protection for customers. We expect all suppliers to comply with these tougher obligations but if our investigations find otherwise we will take strong action."
Last October Ofgem introduced tougher obligations meaning suppliers have to be proactive in preventing misselling to customers both face to face and over the phone. Also, if suppliers are selling contracts face-to-face they must provide customers with an estimate before any sales are concluded. In most circumstances customers should also receive a comparison of the supplier's offer with their current deal.
Which? Chief Executive, Peter Vicary-Smith, said: "It's shocking that Ofgem is having to investigate mis-selling by such a large slice of the UK's energy market. This will do nothing to improve consumer trust in energy suppliers.
"We're pleased that Ofgem has promised tough measures against any firms guilty of mis-selling. We hope it uses this opportunity to tighten rules around telesales so they are in line with those for face to face sales."
(CD/GK)
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