Energy scandal: British Gas to pay out £1 million to compensate for mis-selling

4th July 2014

img

British Gas has been forced to compensate thousands of customers after mis-selling them energy deals by exaggerating how much they could save if they switched to the country’s largest energy supplier.

Energy regulator Ofgem has demanded British Gas pay out £1 million after the company mis-sold to customers in Sainsbury’s supermarkets and in Westfield shopping centre in West London between February 2011 and March 2013.

In this time British Gas staff made exaggerated claims to customers and sales staff did not compare tariffs on a like-for-like basis to give customers an accurate view of costs. They compared monthly direct debits with quarterly payment methods to product inaccurate savings estimates. Customers were told they would save money by switching but in fact British Gas charged them more.

The staff an branding within Sainsbury’s store also did not make clear that British Gas was the supply partner for Sainsbury’s Energy when encouraging people to switch.

A total of £566,000 will now be paid to 4,300 customers- with an average payment of £130 – and a further £433,000 will go to directly benefit customers through the British Gas Energy Trust, as part of the £1 million settlement.

Sarah Harrison, senior partner in charge of enforcement at Ofgem, said: ‘Ofgem expects all supplie to put this poor behaviour behind them and really start acting in a way that will help consumers trust energy supplier. Where they don’t, Ofgem will act.’

Jeremy Cryer of comparison site Gocompare.com said the £1 million payout was ‘a drop in the ocean to British Gas owner Centrica, which made £2.7 billion profit last year’.

‘This is another blow to public trust for the best known name in the UK energy industry at a time when energy companies are already facing an investigation by the Competition and Markets Authority,’ he said. ‘Seeing another of the ‘big six’ energy companies in the headlines for all the wrong reasons could push even more customers to consider switching to one of the smaller providers which have less tarnished reputations.’

A recent Gocompare survey showed 71% of customers who switched their energy tariffs in March and April opted for a smaller provider.

‘All suppliers, large and small, are regulated by Ofgem and as such consumers are protected in the same way no matter who they buy their energy from. So if you’re fed up with how your energy provider is treating you, find the best deal with a different supplier and switch to it.’

 

1 thought on “Energy scandal: British Gas to pay out £1 million to compensate for mis-selling”

  1. Noo 2 Economics says:

    Re-nationalise the whole lot – problem solved!

Leave a Reply

Your email address will not be published. Required fields are marked *