3rd April 2013: Gas Sales Tactics in the Spotlight Following £10.5m Fine

3rd April 2013 written by Richard Hearne in the category Latest News

The gas supplier SSE (previously Scottish & Southern Energy) is in the news headlines today following a large fine which has been issued by the national gas and electricity regulator OFGEM (The Office of Gas and Electricity Markets).
SSE is one of the ‘big six’ energy suppliers in the UK supplying gas to domestic and business properties. The fine of £10,500,000 (£10.5 million) is unprecedented and the largest fine handed out to an energy company. The fine has been issued due to use of misleading sales scripts, failed auditing of selling practices due to use of commission, failure to produce accurate estimates and those of competitors, and failure to take into account all relevant information when estimating a customer’s annual energy consumption.

The finger has been pointed at management failures for allowing a culture of questionable sales tactics which were allowed to manifest and continually breach OFGEM regulations over a long period of time on customers doorsteps, on the phone and in shops. Doorstep selling has long been a divisive issue among the ‘big six’ energy suppliers in the UK. These companies include British Gas, EDF, EON, N Power, Scottish Power, and SSE.

In the news reports it is claimed that SSE used false statements to customers to persuade customers to sign up for their services. OFGEM’s press statement is damning: ‘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’. They go on to say ‘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’.

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