Monday December 22, 03:42 PM
British energy watchdog fines Npower £1.8 mln for misselling
By Roland Jackson
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LONDON (AFP) - British domestic energy supplier Npower was fined 1.8 million pounds (1.9 million euros, 2.6 million dollars) on Monday for the mis-selling of electricity and gas contracts, regulator Ofgem said.
Npower, which is owned by German power giant RWE (Xetra: 703712 - news) , said in response that it had improved its procedures since Ofgem launched its investigation into the company in April.
"Energy regulator Ofgem is to fine Npower 1.8 million pounds after the supplier failed to take sufficient action to prevent mis-selling of energy contracts to customers," the watchdog said in a statement.
"Ofgem found that Npower breached a supply licence condition by failing to take adequate steps following complaints from customers about visits by the company's doorstep salespeople," it added.
"While Npower had procedures in place to follow up complaints, Ofgem judged that company managers had not been proactive enough in applying and improving them. This allowed incidents of misselling to proceed unchecked.
"As a result Ofgem concluded that Npower had failed in its duty to ensure that it had taken all reasonable steps to remedy the matter."
The Ofgem probe was sparked by an undercover investigation by The Sunday Times newspaper, which claimed in April that some NPower staff were persuading customers to sign forms without revealing that they were contracts and were giving misleading information.
Npower said in a separate statement on Monday that such behaviour would not be tolerated.
"We were very disappointed and concerned when we found out that back in April some sales staff were deliberately flouting our procedures," the group said.
"We set high standards and there is no place for this behaviour in our company so we immediately dismissed those who were acting fraudulently."
Npower added that its doorstep staff were now obliged to validate their new sales through a special call centre.
"As a result of this and other measures, like mystery shopping, our sales complaints have declined to an all-time low and we will remain constantly vigilant to ensure that they remain so," it added.
Britain has six big domestic energy providers. They also include Centrica (LSE: CNA.L - news) unit British Gas, the British arm of Electricite de France, German-owned EON UK, Scottish & Southern Energy, and Scottish Power (LSE: SPW.L - news) which is owned by Iberdrola (Madrid: IBE.MC - news) of Spain.
"This decision sends a clear message to energy suppliers that failing customers ... will lead to Ofgem action, as well as associated reputational damage," added Sarah Harrison, Ofgem's Managing Director of Corporate Affairs.
"Mis-selling undermines consumer confidence, but getting it right on the doorstep can help customers make effective choices in the energy market."
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