- 12 updates
My research today shows that the scandal within a scandal here is that the regulator could not order Eon to pay a penny back to customers. The law would not allow it. The only way the £12 million "penalty" was reached was through agreement with E.ON itself.
The law has only just been changed to allow Ofgem to force energy firms to payback - and they are not allowed to use it in cases (like this) where the misdeeds go back years.
Ofgem has defended its decision to order energy firm E.ON to pay £12 million to customers, despite the company making an £8 billion turnover.
Sarah Harrison, the regulator's senior partner in charge of enforcement told ITV News that compensation was not the only issue at hand, but making the energy market "simpler, clearer and fairer for customers" was also an important factor.
Investigations in 2011 showed that energy suppliers were not giving customers the best deal, a consumer watchdog has said, after E.ON was ordered to pay £12 million to vulnerable customers. Which? executive director said it was "extraordinary" it had continued for so long:
Britain's energy market is broken, the shadow energy and climate change minister has said, after regulator Ofgem found that energy supplier E.ON has mis-sold to customers. Jonathan Reynolds said in a statement:
The Energy Secretary has welcomed a £12 million redress package, after regulator Ofgem found energy firm EO.N had broken sales rules.
Ed Davey said: "It's right that if energy companies aren't fair to their customers, then they're penalised - and their customers benefit.
"That's why we introduced legislation to ensure Ofgem can take tough action in these cases, including making the company pay compensation to the people affected."
E.ON's chief executive has admitted the energy supplier did not have "enough rules, checks and oversight" in place, after Ofgem ordered the firm to pay £12 million to customers over mis-selling.
Tony Cocker said as part of overhauling its sales operations the company has ended face-to-face sales and outbound residential cold calling.
He added: "It is completely unacceptable that we may have been unclear with customers about their tariff choices and as a result those customers may not have made the best choices for them [...] There was no organised attempt to mislead, and Ofgem has acknowledged this".
E.ON has agreed to pay £12 million to vulnerable customers after an Ofgem investigation found that the energy supplier had failed to properly train its staff in providing correct information to customers, which could have misled customers. As part of this package E.ON said they will:
- Pay around £35 to 333,000 of their customers who are normally recipients of the Warm Home Discount. This redress package is thought to benefit pensioners, disabled and low income families.
- Additionally, E.ON has agreed to make automatic payments to some vulnerable customers who may have been affected by E.ON’s poor sales practices.
- The supplier will write to around 465,000 customers it has identified through its redress work, informing them of how to get in touch to find out whether they were mis-sold to.
Ofgem has praised E.ON for "accepting responsibility for its actions" after the energy watchdog found the supplier had mis-sold to customers. Ofgem's senior partner in charge of enforcement said:
Latest ITV News reports
E.ON has said it will compensate customers it may have mis-sold to. Find out how to make a claim.
E.ON boss Tony Cocker has apologised after the energy firm was found to be misleading customers, according to an investigation by Ofgem.