British Gas to pay £1m mis-selling compensation

British Gas mis-sold to Sainsbury's customers. Picture: PA

Energy regulator Ofgem said the package includes £566,000 direct compensation to affected customers and £434,000 to help vulnerable customers via the British Gas Energy Trust.

Ofgem said that some face to face sales at branches of the supermarket giant, the savings quoted by British Gas employees to prospective Sainsbury’s Energy and British Gas customers were “exaggerated”.

In some cases customers were told that they would save money when in fact, it was more expensive to switch to Sainsbury’s Energy or British Gas. The mis-selling also occurred at the Westfield Shopping centre in London.

Ofgem also found that British Gas staff did not compare tariffs when explaining pricing to customers and also did not make clear that British Gas was the partner provider for Sainsbury’s Energy.

However, the regulator said it had not carried outn a formal investigation, after British Gas voluntarily reported the practice to Ofgem itself in April last year and decided to accept the offered compensation package.

Sarah Harrison, Ofgem senior partner in charge of enforcement, said: “Ofgem expects all suppliers to put this poor behaviour behind them and really start acting in a way that will help consumers trust energy suppliers. Where they don’t, Ofgem will act.”

An average payment of around £130 has been made to more than 4,300 Sainsbury’s Energy and British Gas customers - including around 1,300 customers who could not be contacted and who have had an automatic refund applied to their account.

British Gas apologised for its conduct.

Ian Peters, managing director of British Gas Residential, said: “We are very sorry and have ensured no customer will be out of pocket as a result. We’re pleased that Ofgem the energy regulator recognises the actions we have taken to ensure the right outcome for our customers.

“We pride ourselves on our high standards and it is extremely disappointing when even a relatively small number of customers don’t receive the service they expect from us.”