Energy industry regulator Ofgem has ordered one of the UK's Big Six energy providers – E.ON – to pay a massive fine following an investigation into mis-selling at the company.
Ofgem told the firm it has to pay £12 million, which will comfortably be the largest payout for mis-selling it has given out to a UK energy supplier. A few months ago, npower was ordered to pay a £3.5 million fine after a similar investigation was carried out by the regulator.
Tony Cocker, chief executive of E.ON UK, apologised for the company's actions and admitted it was "completely unacceptable" sales staff at the firm had not been clear enough with customers about their energy tariffs.
"There was no organised attempt to mislead, and Ofgem has acknowledged this, but that does not excuse the fact we did not have in place enough rules, checks and oversight," said Mr Cocker, who pointed out the energy supplier has already started to overhaul its sales processes in the wake of the investigation.
Sarah Harrison, senior partner in charge of enforcement at Ofgem, stated that energy companies have to work hard to rebuild trust among the general public and said it is time to "draw a line under" the mis-selling scandals to have blighted firms such as E.ON and npower.
She said: "E.ON has today taken a good step by accepting responsibility for its actions and putting proper redress in place."
The mis-selling at E.ON occurred between June 2010 and December 2013 and Ofgem stated that it is likely a "large" number of customers were mis-sold energy contracts during this time, although it is difficult to estimate exactly how many of them were affected.
As part of the deal with Ofgem, E.ON has agreed to pay around £35 to 333,000 of their customers who are typically among the recipients of the Warm Home Discount. The company will also make automatic payments to some of the vulnerable customers who may have been affected by poor sales practices at E.ON.
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