npower fined £1.8million for mis-selling energy contracts

23 December 2008 / by Rebecca Sargent
Ofgem, the energy regulator, is to fine energy provider npower to the tune of £1.8million after it failed to actively prevent the mis-selling of energy contracts through doorstep selling.

According to Ofgem, customers had been complaining of npower's underhand tactics as doorstep salespeople. However, npower failed to adhere to procedures when it came to responding to the complaints.

The regulator said that it found npower's company managers negligent when it came to applying the complaint procedures that the company had in place. And, as a result, the gas and electricity provider allowed incidents of mis-selling to proceed without being checked.

Commenting on its decision to impose a fine of £1.8million, Ofgem's managing director of corporate affairs, Sarah Harrison, said: "This decision sends a clear message to energy suppliers that failing customers and falling short of the licence standards will lead to Ofgem action, as well as associated reputational damage.

"Mis-selling undermines consumer confidence, but getting it right on the doorstep can help customers make effective choices in the energy market. This is why Ofgem's energy supply market probe committed to strengthening the doorstep selling rules."

And, according to Ofgem, the utility provider got away lightly due to prompt action, as in other circumstances the fine could have been much higher.

Doorstep selling of energy contracts is something Ofgem intend to tackle next year, which it hopes will reduce the number of gas and electricity deals that are mis-sold.

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