Industry regulator Ofgem orders multinational energy giant E.on to pay £12 million in fines — less than a week’s profit — for “extensive” mis-selling practices spanning from June 2010 to December 2013
Greey energy privateer E.on was ordered to pay a record fine yesterday for mis-selling and misinforming vulnerable customers on tariffs.
Industry regulator Ofgem ordered the multinational energy firm to pay £12 million in fines — worth less than a week’s profits — for “extensive” mis-selling practices spanning from June 2010 to as recently as last December.
The regulator said it was imposing its biggest-ever fine on the firm in light of failures to train and monitor staff, misinforming customers, “insufficient attention to energy sales rules” and disclosing key terms of contracts only after customers had signed up.
But an Ofgem spokeswoman bizarrely praised the firm yesterday for “accepting responsibility,” adding that the regulator hoped to “draw a line under past supplier bad behaviour.”
E.on chief executive Tony Cocker insisted he was “personally absolutely devastated” by the decision.
But the fine is unlikely to rattle shareholders, with E.on Britain’s supplier division posting quarterly profits of £177m earlier this week — a rate of around £13.6m in pure profits each week.
The cash E.on coughs up is expected to go to around 333,000 customers categorised as living in fuel poverty, offering them £35 each.
But Fuel Poverty Action’s Clare Welton said the gesture did nothing to stem the real causes of hardship.
“Our for-profit energy system makes mis-selling inevitable. When energy is a commodity to be sold for maximum profit and not a resource for public good, companies will always ‘break the rules’ to make the most money.
“E.on’s ‘bad behaviour’ is yet another sign that our energy system is broken and only adds to the calls for energy to put into the hands of communities and local authorities, which are already leading the way with renewable, not-for-profit energy projects across the country,” she said.
The Campaign for Public Ownership’s Neil Clark agreed. He said Mr Cocker’s plea to MPs last year to “depoliticise” the energy debate made it clear that the industry’s main concern was avoiding renationalisation, whatever the cost.
“I don’t think they mind too much – it’s a levy.
“They show you the yellow card, in football terms, to show you there’s a referee — but the game is still rigged,” he added.