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.
You can’t buy a revolution, but you can help the only daily paper in Britain that’s fighting for one by joining the 501 club.
Just £5 a month gives you the opportunity to win one of 17 prizes, from £25 to the £501 jackpot.
By becoming a 501 Club member you are helping the Morning Star cover its printing, distribution and staff costs — help keep our paper thriving by joining!
You can’t buy a revolution, but you can help the only daily paper in Britain that’s fighting for one by become a member of the People’s Printing Press Society.
The Morning Star is a readers’ co-operative, which means you can become an owner of the paper too by buying shares in the society.
Shares are £1 each — though unlike capitalist firms, each shareholder has an equal say. Money from shares contributes directly to keep our paper thriving.
Some union branches have taken out shares of over £500 and individuals over £100.
You can’t buy a revolution, but you can help the only daily paper in Britain that’s fighting for one by donating to the Fighting Fund.
The Morning Star is unique, as a lone socialist voice in a sea of corporate media. We offer a platform for those who would otherwise never be listened to, coverage of stories that would otherwise be buried.
The rich don’t like us, and they don’t advertise with us, so we rely on you, our readers and friends. With a regular donation to our monthly Fighting Fund, we can continue to thumb our noses at the fat cats and tell truth to power.
Donate today and make a regular contribution.