4th Jul 2014 09:13
LONDON (Alliance News) - The UK energy market regulator Ofgem said Friday that it has secured a GBP1 million package from Centrica PLC-owned British Gas over mis-selling practices.
Ofgem said that the package has been secured after the company mis-sold to customers in Sainsbury's stores nationwide and in Westfield shopping centre, Shepherds Bush. In addition, staff and branding in Sainsbury's stores did not make clear that British Gas was the supply partner for Sainsbury's Energy, said the regulator.
Under the terms of the package, British Gas will deliver GBP566,000 in direct compensation to affected customers and GBP434,000 to help vulnerable customers via the British Gas Energy Trust.
Ofgem said British Gas has identified customers who were potentially mis-sold to and has made an average payment of GBP130 to 4,300 affected customers. It was unable to contact around 1,300 ex-customers and this compensation is part of the GBP434,000 that will go to directly benefit customers via the British Gas Energy Trust.
"Ofgem expects all suppliers to put this poor behaviour behind them and really start acting in a way that will help consumers trust energy suppliers. Where they don't, Ofgem will act," said Sarah Harrison, senior partner in charge of enforcement at the regulator.
According to Ofgem, the company became aware of the issue and reported it to Ofgem in April 2013 and took immediate action to correct the issues. Due to this, the regulator will not open a formal investigation, "Given British Gas' prompt action, Ofgem has decided to accept this consumer package in lieu of opening a formal investigation," said Harrison.
Last week Ofgem said that following on from proposals in March, it is referring the UK energy market to the Competition and Markets Authority for a full investigation, asking it to investigate the barriers to competition inherent with the "big six" suppliers.
The regulator proposed the investigation in March, saying that the market needs a market investigation "to clear the air," with the investigation expected to reassure consumers and complement Ofgem's reforms for a simpler, clearer and fairer energy market.
Centrica shares were trading marginally lower Friday morning, down 0.22% at 314.11 pence per share.
By Alice Attwood; [email protected]; @AliceAtAlliance
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