Energy provider E has been fined £260,000 by Ofgem for misleading its customers.
The energy watchdog found that E misled customers and failed to perform sufficient background checks on its sales staff.
The energy firm contracted a third-party agency, Energy Watch UK to sell to consumers. Ofgem has found in its investigation that sales staff at the agency failed to tell prospective customers they were employed by E, and in fact portrayed themselves as working for an independent price comparison service.
Ofgem also found that the company failed to perform sufficient background checks on its face-to-face sales agents. According to the watchdog, senior management at E knew about the failings as long ago as 2014 but failed to do anything to rectify the situation until this year.
Ofgem states that the provider has now fully cooperated and has worked toward greater transparency in its sales process with Energy Watch UK. A better standard of background checks is now in places for its sales agents including criminal records checks on all new and existing agents.
The firm will make a payment of £260,000 to Ofgem’s Voluntary Redress Fund. The money will go to charity, including help for vulnerable energy consumers.
‘Fine is important reminder to all suppliers’
Ofgem’s senior partner in improving regulation Martin Crouch comments: “E did not put security and transparency first when it came to face-to-face sales, and risked the trust and wellbeing of potential customers.
“This payment sends an important reminder to all suppliers that there’s no room for misleading behaviour when it comes to selling energy.
“E has since worked well with Ofgem, and has changed its processes to make sure its agents have sufficient background checks and carry out sales in a transparent way.”