Ofgem to launch energy firm mis-selling probe

OFGEM has launched an investigation into four energy companies amid concerns of mis-selling to consumers, it announced today.

Energy regulator Ofgem said it was prepared to take “strong action” if it found that npower, Scottish Power, Scottish and Southern Energy and EDF Energy were failing to comply with new obligations to prevent mis-selling.

It has set up a hotline for consumers who are concerned about the sales approaches employed by suppliers to sell energy contracts, either face to face or by telephone.

The move follows tougher obligations imposed on suppliers in October as part of Ofgem’s investigation into the energy retail market.

Ofgem spokesman Andrew Wright said: “Suppliers have existing obligations to detect and prevent mis-selling, and new licence conditions were brought in to further increase protection for customers.

“We expect all suppliers to comply but if our investigations find otherwise we will take strong action.”

Under the new obligations, suppliers must be “proactive” in preventing mis-selling.

Suppliers who are selling contracts face to face must provide customers with an estimate before any sale is concluded.

Customers should usually also receive a comparison of the supplier’s offer with their current deal.

Consumer Focus head of energy Audrey Gallacher said: “This is a welcome step by Ofgem to address years of customers getting a bad deal on energy prices on their doorstep.

“Complaints have declined since new rules came into effect this year, but suppliers still seem to be flouting the rules.”