Is Everyone Mis-selling?

Is everyone mis-selling? It certainly seems that way. So it is little wonder that close to two million customers of the Big Six have switched due to soaring price of energy bills.

We mentioned earlier in the year that five of the ‘Big Six’ energy suppliers – E.On, Npower, SSE, ScottishPower and British Gas have come under close scrutiny by regulators, for mis-billing customers. This forced Ofgem to announce they would launch a full investigation into mis-selling that could lead to the break-up of the Big Six.

With 1.7 million households this year complaining it was pleasing to hear that E.ON has been ordered to pay £12m in compensation to vulnerable customers for mis-selling. Between June 2010 and December 2013, E.ON staff failed to provide customers with information about their tariff options and as a result, many clients did not make the best choice.

Also under the spotlight - Ofgem has been monitoring Npower’s service closely since it was revealed that the energy giant received the highest number of complaints by far in the first quarter of this year. Subsequently, Ofgem issued an ultimatum and Npower had until the end of August to cut the number of households affected by late billing from the current level of 400,000 to 100,000 or they would be forced to stop all telephone sales. So far there is no indication as to whether the target has been met.

Complaints about Scottish Power almost doubled in the first three months of this year as 1700 out of every 100,000 customers had either incorrect or missing bills after they introduced a new billing system. In an effort to deal with the mounting problem the firm has hired an extra 250 call centre staff and the centre is now open until 10pm instead of 7pm. But is this too little too late?

And the latest mis-selling scandal to hit the energy market is that British Gas is expected to compensate thousands of customers after admitted it exaggerated savings to prospective customers in Sainsbury's stores nationwide between 2011 and 2013 if they switched to one of its tariffs.

Let us hope this is the last fine Ofgem has to dole out for systematic mis-selling but we very much doubt it. Since 2010, Ofgem have imposed nearly £100m in fines £39m alone for mis-selling tariffs.

date added: 18/09/2014

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