Ofgem to probe energy firms

ENERGY regulator Ofgem is launching an investigation into whether four major gas and power suppliers are mis-selling products to customers.

Ofgem’s probe will determine if EDF Energy, RWE Npower, Scottish and Southern Energy (SSE), and Scottish Power are complying with obligations brought in last October that aimed to stop miss-selling of energy contracts.

“Suppliers have existing obligations to detect and prevent mis-selling and new licence conditions were brought in following our probe to further increase protection for customers,” Andrew Wright, Ofgem’s senior partner of markets, said.

Consumer protection groups welcomed the investigation and said current practices still encouraged utilities to mis-sell products.

“Some customers are still being given misleading quotes and information, which leaves them worse off when they switch provider,” Audrey Gallacher, head of energy at Consumer Focus, said.

Ofgem has told affected customers to phone its helpline number if they feel they have been mis-sold energy.

“While many doorstep sales people will do a good job, the pay and rewards system continues to encourage mis-selling, despite years of regulation and voluntary initiatives,” it said.

SSE said it believed it was complying with the new rules. “As a responsible company we take seriously all our customers’ issues and would ask any prospective or existing customer to contact us if they are concerned, and we will work with them to resolve the situation,” the company said in a statement.

Ofgem fined Npower £1.8m in 2008 for mis-selling, and London Electric (now part of EDF Energy) £2m.