Ofgem fines SSE £10.5m

Largest fine ever imposed on an energy supplier.

New Statesman
Photograph: Getty Images.

The British electricity and gas markets regulator Ofgem has imposed a fine of £10.5m on electric utility SSE for failures at all stages of sales processes.

In its investigation, the regulator found that SSE’s agents made misleading and unsubstantiated statements about savings in telephone, in-store and doorstep sales.

In addition, the regulator also faulted SSE for management failures, saying there was inadequate monitoring and control of the behaviour of sales agents and the issue was not considered a sufficiently high priority by SSE’s senior management.

The fine, which is largest fine ever imposed on an energy supplier, highlights the regulator’s tougher approach to the “Big Six” power companies ahead of a shake-up of the retail energy market, reported the Financial Times.

Ian Marlee, a senior partner at Ofgem, said the fine sent a clear message to the energy companies that they need to put consumers first. And if they don’t, Ofgem will crack down hard on them.

Energy minister Michael Fallon said: “I have rarely seen a worse case of consumers being misled. With rising energy prices and multiple tariffs to contend with, consumers deserve the clearest, fairest and best possible deal.”

Labour MP Barry Gardiner said: “The activities that SSE have engaged in appear to be nothing short of fraud and it would be appropriate for the regulator to refer this matter for further investigation to the police.”

Peter Atherton, a utilities analyst at Liberum Capital, told the Financial Times: “It eliminated the only sales route that really worked, reducing the churn rate, which substantially benefited the incumbents. There will be hundreds of thousands of people sitting on the wrong tariff, paying more than they would have done if someone had knocked on their door and convinced them to switch supplier.”

SSE, formerly Scottish and Southern Energy plc, said it was deeply regretful that breaches occurred and apologised to customers who had been affected. The electric utility has set aside up to £5m to compensate customers for misleading and providing inaccurate information.