Record £10.5 Million Fine For SSE

UK energy market regulator Ofgem is to fine SSE £10.5 million for numerous breaches of its obligations relating to telephone, in-store and doorstep sales activities. The level of fine reflects the seriousness and duration of breaches, the likely substantial harm that they have caused and the likely gain to SSE, which is one of the UK’s ‘big six’ energy suppliers.

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.

Ofgem 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 follows a sale. In particular, SSE consistently failed, over a prolonged period of time, to conduct its sales activities in a way that would provide clear and accurate information on prices and potential savings to enable customers to make an informed decision about whether to switch suppliers. Although SSE terminated doorstep sales in July 2011, failures in telephone and in-store sales persisted.

Sarah Harrison, Ofgem’s Senior Partner in charge of enforcement, says: “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.”

She adds: “The 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.”

SSE has in place a £5 million misselling fund, where customers can receive compensation if they have been missold to.

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