British Gas is set to pay out around £500,000 in compensation to customers for mis-selling gas and electricity in face to face sales.
The UK’s biggest energy provider is understood to have referred itself to the regulator Ofgem after discovering it had overestimated potential savings customers could make, according to a Sky News report last night.
The mis-selling is thought to affect around 4,300 people who signed up to policies with British Gas and Sainsbury’s Energy between February 2011 and March 2013.
British Gas is making goodwill payments of around £130 to those customers affected.
The scandal is the latest in a number to hit the energy sector and comes just days after Ofgem announced a full-scale competition investigation to ensure customers are getting value for money from their energy tariffs.
The regulator has referred the big six UK energy providers to the Competition and Markets Authority amid concerns over pricing. The move follows intense political pressure from Labour leader Ed Miliband.
Sainsbury’s Energy has operated in partnership with British Gas for a number of years. The latter is part of the FTSE 100 firm Centrica.
Sainsbury’s Energy, British Gas and Ofgem all declined to comment.