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Scottish Power gives £8.5m compensation to mis-selling victims

Firm avoids fine through deal with regulator

Scottish Power customers are awaiting a total of £8.5 million in compensation today after regulators found the firm misled tens of thousands of households over its prices.

The energy retailer admitted yesterday to luring customers with unreliable comparisons of yearly fuel bills - but fuel poverty campaigners said the market itself was the real rip-off.

Industry regulator Ofgem found that Scottish Power's door-to-door sales and telemarketing campaigns between 2009 and 2012 failed to provide an accurate formula for estimating household consumption or accurate comparisons of its own annual charges alongside those of competitors.

Nor did the company "adequately monitor" or train its salespeople to prevent misleading claims.

"While there is no evidence that the contraventions were deliberate or wilful, the contravention cannot be regarded as accidental or inadvertent," the regulator said.

Scottish Power chief executive Neil Clitheroe apologised "unreservedly" for the episode, adding that the firm had implemented new controls since the investigation began.

But the firm will pay a nominal fine of just £1 in light of the company's offer of compensation.

A deal will see £7.5m in payouts of at least £50 to each household in fuel poverty on the Warm Homes Discount Scheme.

Another £1m fund will go to victims of mis-selling who apply for compensation of between £5 and £30.

But Fuel Poverty Action's Eva Jay said it was unfair to pin the blame on sales staff.

Aggressive marketing was designed "to make the best deal, not for customers, but for the company."

"Mis-selling is part of a culture of squeezing the most out of customers who are often confused about tariffs, can be charged a fee to leave a scheme and who can find that even their 'fixed tariffs' can change.

"The big six and a market in energy are the problem here.

"The only scheme we want to see is a public and democratically controlled one where the customer isn't just a customer, the customer is the owner of the energy source and service itself," she said.

Energy Action Scotland director Norman Kerr urged customers to continue to "shop around" but said he agreed that switching suppliers could not solve Britain's fuel poverty crisis.

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