Eon to pay out £12m to customers after mis-selling

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Power supplier Eon is paying a record £12 million to vulnerable customers after a probe found it had “extensive poor sales practices”.

Regulator Ofgem today said that the redress package – the biggest ever payout to customers by a supplier – reflects Eon’s selling tactics between June 2010 and December 2013. Given the large number of contracts signed in this period, Ofgem said it was likely that a large number of customers were the victims of mis-selling.

The watchdog’s investigation found that Eon failed to properly train and monitor its own staff and those employed through third party telesales agencies, leading to incorrect information being given to customers on the doorstep and over the phone.

Sarah Harrison, senior partner in charge of enforcement said: “Since 2010, Ofgem has imposed nearly £100m in fines and redress on energy companies for various rule breaches, including £39m for mis-selling, and introduced radical new reforms to make the market simpler, clearer and fairer for consumers.

“The time is right to draw a line under past supplier bad behaviour and truly rebuild trust so consumers are put at the heart of the energy market. Eon has today taken a good step by accepting responsibility for its actions and putting proper redress in place.”

Under Eon’s redress plan, 333,000 customers who normally receive the warm home discount will get about £35 each. The supplier will also make automatic payments to some customers who may have been affected by its poor sales practices.

Tony Cocker, UK chief executive of the German-owned firm, said: “We are really sorry and want to make it absolutely clear that we’re putting this right.

“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.”