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Regulator Ofgem finds failures “at every stage of sale process”
UK energy sector regulator Ofgem is to fine SSE £10.5million for numerous breaches of its obligations relating to telephone, in-store and doorstep sales activities.
In a statement Ofgem said the “level of fine reflects the seriousness and duration of breaches, the likely substantial harm that they have caused and the likely gain to SSE”.
Ofgem found that a failure of SSE’s management arrangements meant that insufficient attention was paid to ensuring compliance with obligations. This, the regulator argued, enabled misleading and unsubstantiated statements to be made by sales agents to potential customers about savings.
Finding “failings at all stages of SSE’s sales processes, from the opening lines on the doorstep, in-store or over the phone through to the confirmation process which follows a sale. In particular, SSE consistently failed, over a prolonged period of time, to conduct its sales activities in a way that would provide clear and accurate information on prices and potential savings to enable customers to make an informed decision about whether to switch suppliers”.
Although SSE terminated doorstep sales in July 2011, failures in telephone and in-store sales persisted.Sarah Harrison, Ofgem’s Senior Partner in charge of enforcement said: “In order to restore trust in the energy market suppliers must comply with their obligations and play it straight with consumers. Ofgem’s findings show SSE failed its customers, missold to them and undermined trust in the energy supply industry.
“These failings did not just take place on the doorstep but also in the management of SSE. Ofgem’s fine reflects an absence of effective management control over energy selling.
“Today’s fine sends a clear message to suppliers that Ofgem will hold to account those companies which fail to treat consumers fairly. It is time for the energy industry to take note and get behind Ofgem’s reforms to rebuild trust and make the market simpler, clearer and fairer for consumers.”
Responding to the fine William Morris, SSE’s Retail Managing Director, said “It has been clear to me from my first day at the company that everyone at SSE is deeply regretful of the way in which we failed to manage and monitor some sales activities, particularly between 2009 and 2011, when, unacceptably, standards slipped below the high levels all customers should be able to expect”.
“During the period in question we worked hard to offer competitive prices and carve out an industry-leading position on customer service. We did not, however, spend enough time monitoring our sales processes. That meant we did not always sell in the right way, and we let some customers down.
“When I joined SSE, it was clear that efforts to put things right were well under way. Existing and potential customers can rest assured that we now have the systems, procedures, staff, training and auditing in place to ensure that they will not be let down again.”
