Energy regulator Ofgem says energy supplier EDF Energy has offered to pay £4.5 million after an investigation revealed that EDF had breached regulations governing the provision of sales information.
Ofgem’s investigation found that EDF sales teams did not always provide customers with complete information during the sales process, for example on some contract terms or on the way in which their monthly direct debits had been calculated, and on how estimates of their annual consumption were calculated.
Ofgem also found that EDF telesales agents sometimes made opening statements in their calls to customers that claimed savings before knowing whether the statements were accurate for the specific customer, and sometimes assumed that the customer was on a standard tariff without checking. This meant the customer might not have had all the information they should have had to make an informed decision.
Ofgem decided that instead of imposing a fine, consumers will better served by EDF Energy making payments to benefit those customers most in need. Ofgem says that had EDF Energy not committed to deliver the package, the penalty would have been higher.
Of the £4.5 million package, £1m will be donated to support the Energy Best Deal public awareness campaign run by Citizen’s Advice. This is aimed at building the confidence of householders across England and Wales to shop around, reduce their bills and get help if they are falling behind with energy payments.
£3.5 million will be used to reduce the bills of EDF Energy customers at risk of fuel poverty, in particular those who are eligible to receive pension credit and the Warm Home Discount.
Ofgem is continuing its investigations into Scottish Power, SSE, and npower. Ofgem took enforcement action in 2008 and 2002 against npower and London Electricity. In 2009 it introduced new tougher licence conditions on marketing in order to improve the performance of suppliers.
Ofgem says today’s escalation in payment reflects the tougher standards, and the fact that Ofgem has had to take repeated regulatory action in this area against a number of suppliers over a number of years.
The Energy Best Deal Campaign has published a series of short films on YouTube that cover shopping around for a better energy deal, energy efficiency, getting help with bills, dealing with sales people, making a complaint and debt and disconnection.
Here is the link: Energy Best Deal Campaign videos