Economy Energy fined £250,000 for mis-selling contracts

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Economy Energy fined £250,000 for mis-selling contracts
Economy Energy fined £250,000 for mis-selling contracts


Economy Energy has been fined £250,000 for mis-selling to customers and poor communication, the regulator has announced.

Ofgem found that the company mis-sold energy contracts between October 2012 and December 2013.

An investigation found sales agents quoted inaccurate comparative savings, providing a misleading guarantee of cheaper prices than those offered by the six largest suppliers.

The also failed to behave fairly and professionally, in part because of inadequate training and a lack of management oversight, Ofgem said.

The supplier also did not make it clear to prospective customers that they would be signing up to a 12-month contract and failed to give advance notice of price increases in April and November 2013, affecting up to 70,000 customers.

Customers were therefore not given the opportunity to switch before the price increases took effect.

Some who were moved to a more expensive tariff reclaimed their money, and Economy Energy gave £100,000 of unclaimed cash to the National Children's Bureau to help families living in fuel poverty.

Economy Energy has already paid over £23,000 to nearly 500 affected customers, and Ofgem said it expected the supplier to do more to identify and compensate any remaining customers caught up in the problems.

Anthony Pygram, Ofgem's senior partner with responsibility for enforcement, said: "Economy Energy let its customers down badly.

"These were predominantly prepayment customers who are more likely to be vulnerable and Economy Energy failed to protect them.

"Economy Energy has taken steps to improve its practices during the investigation.

"We now expect it to treat its customers fairly and act in line with its obligations at all times.

"We welcome new suppliers into the market, but as an essential service provider they must abide by rules and treat customers fairly, especially where vulnerable customers are concerned.

"Failure to do so contributes to a lack of trust and engagement in the energy market."

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