ENERGY supplier SSE has apologised to customers after learning that it is to be fined a record £10.5m for prolonged and extensive mis-selling, described as a “woeful catalogue of failures”.
Energy watchdog Ofgem said it found failures at every stage of the sales process across SSE’s telephone, in-store and doorstep selling activities, adding that the level of the fine reflected the seriousness and the duration of the mis-selling, as well as the harm caused to customers.
SSE provided misleading and unsubstantiated statements to potential customers about prices and savings that could be made by switching to SSE, according to Ofgem.
Management at SSE, one of Britain’s big six energy suppliers, failed to pay enough attention to compliance which allowed the mis-selling to take place, added Ofgem.
Ian Marlee, managing director for markets at Ofgem, said: “This is a woeful catalogue of failures by the SSE management.
“This fine represents the fact that what they were doing was allowing a culture of mis-selling to continue, they weren’t doing enough to prevent sharp selling practices from their selling agents, they actually provided misleading sales scripts.
“Some people were being told they were going to get savings when actually they were being put on a worse deal. People were expecting savings and were not getting the levels of savings, people were being told direct debit levels that made it sound like they were going to be better off when, in fact, they were worse off.
“What we need and what we expect from energy companies is they have a culture of putting consumers first and complying with the rules.”
The fine will be paid to the Treasury, Marlee said.
SSE, which has around 10 million domestic customers in the UK, stopped doorstep selling in July 2011, but Ofgem said failures continued over the telephone and in-store.
SSE said it was deeply regretful that breaches occurred and says it has apologised unreservedly to any customers who have been affected by sales activity which ran counter to the values and culture of the company.
It insisted its sales practices have been overhauled since Ofgem launched its investigation, but admitted that it did not move fast or far enough.
As well as halting all doorstep selling, SSE has also brought all domestic telesales in-house, launched a new training programme for sales staff and set up a post-sales verification process.
The group has restructured, creating a retail division and hiring externally to head up the new team, with a new director of sales also brought on board.
Bonuses were withheld for its three executive directors in 2012 as a result of the mis-selling breaches, it added.
SSE set up a £5m fund to cover mis-selling compensation claims and sent out 970,000 letters to existing customers last year alerting them to its compensation process.
It said it had already paid out more than £400,000 to several thousand customers.
SSE corporate affairs director Alan Young said: “What we were doing was not adequately telling people about the terms and conditions of their contract or adequately making sure they had the information they needed to switch.”