Scottish Power to pay out £8.5 million after an Ofgem investigation

After an investigation undertaken by Ofgem into telephone and door sales, it has come to light that energy company Scottish Power has misled customers during their approach to sales. This has been down to the Scottish Power staff not being properly trained and it means that Scottish Power must pay out £8.5 million to customers. Consumers that are on the “warm home discount” scheme will receive on average £50 each.

Scottish Power will end up having to pay £7.5 million to 140,000 customers who are on the scheme that is established to help customers likely to be at a high risk of fuel poverty.

The remaining £1 million will be paid out to customers who believe they should be compensated for being mis-sold to. Scottish Power ended door sales in 2011 and since the incident, they have also made sure proper checks are carried out on telephone calls.

“Ofgem’s investigation found no evidence of a strategy by Scottish Power to deliberately mis-sell to customers”. Not only did Scottish Power have trouble when it came to their selling, Ofgem also pulled up SSE because of “management failures that led to prolonged and extensive mis-selling through telephone, in store and doorstep sales.” (BBC)

As energy companies do not sell via the doorstep anymore, this has been seen to be the reason why the amount of people switching has reduced. It is just as easy to switch energy providers online via www.energyswitcheroo.com.

Ofgem have instated new rules to ensure energy firms cannot up prices during fixed term contracts and they cannot automatically roll customers onto another fixed contract. Ofgem say that the changes they are making are to make sure customers are getting the best energy deals available.