£3.5m fine for npower

<p>Ofgem has ordered npower to pay a £3.5 million fine.</p>

Ofgem has told npower to pay a £3.5 million fine, with the money set to go directly towards helping vulnerable customers to pay their energy bills.

An investigation by the regulator found npower breached energy sales rules on the doorstep and over the phone, although the energy supplier has since resolved all these issues.

All of the breaches uncovered by Ofgem during the investigation ended by September 2012, with most of the problems arising while the company was making changes to its sales processes.

Ofgem's senior partner in charge of enforcement Sarah Harrison stated that npower has done the right thing by "stepping forward and recognising that, whilst it was making changes to improve its sales processes, weaknesses remained which affected consumers' ability to compare supplier offers fairly".

She added: "These issues have been fully addressed by npower and Ofgem welcomes the company's actions and its agreement to pay £3.5 million to directly benefit vulnerable consumers.

Sales processes

Ms Harrison pointed out that Ofgem will continue to hold companies in the energy sector to account in order to ensure rules to protect consumers are met and that "the market works for consumers in a simpler, clearer and fairer way".

Ofgem's investigation into the sales processes at npower found that the supplier collected insufficient information about a customer's consumption, which meant that they could not make informed decisions on whether to switch energy companies.

It was also noted that information on when some consumers would receive their direct debit discount was inaccurate, as well as how direct debit levels would be reviewed.

Following the announcement of the £3.5 million fine, the share price of RWE npower slipped slightly in the early stages of this morning's (December 20th) trading session.

At 08:33 GMT, stocks in the firm were 0.23 per cent down on the start of the day on the Xetra, which is based in Frankfurt. Stocks were trading at 26.17, well short of the 52-week high of 31.91 recorded earlier in the year.

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