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British Gas to pay out £1m for Sainsbury's Energy dodgy price comparisons

Ofgem accepts Big Six energy giant's compensation scheme in lieu of formal investigation

Hoodwinked British Gas customers are awaiting £1 million in compensation after the firm admitted yesterday to luring in Sainsbury’s shoppers with misleading figures.

Industry regulator Ofgem said the Big Six energy retailer, which posted pre-tax profits of £571m last year, employed dodgy price comparisons in a nationwide supermarket promotion between February 2011 and March 2013.

The watchdog’s report said the campaign’s sales staff and branding did not make it clear that British Gas was the supply partner for Sainsbury’s Energy.

Nor did they compare tariffs on a like-for-like basis. Instead they compared monthly direct debits with quarterly payment methods to produce inaccurate savings estimates.

In some cases customers were told that they would save money by switching when in reality they paid more to Sainsbury’s Energy or British Gas than to their previous supplier.

British Gas managing director Ian Peters said yesterday that the company was “very sorry.”

It is understood that the company has made an average payment of £130 to 4,300 affected customers.

Meanwhile, Ofgem officials said they had accepted the compensation deal in lieu of opening a formal investigation.

The scandal is only the latest in a string of investigations into energy retailers’ mis-selling since 2010, with fines totalling around £40m.

The regulator also announced last week it was calling in the Competition and Markets Authority to investigate the industry, with soaring gas bills and profit margins of around 10 per cent despite a four-year low in wholesale gas prices.


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