LONDON May 16 E.ON UK, one of Britain's "big
six" energy suppliers, will hand out 12 million pounds ($20
million) in compensation to vulnerable customers for
mis-selling, the largest ever such payout by a UK energy firm,
regulator Ofgem said on Friday.
E.ON UK, owned by Germany's E.ON, failed to
properly train and monitor staff leading to incorrect
information being provided to customers, Ofgem said.
Some 330,000 households, including pensioners, the disabled
and low-income families, would receive a payment of about 35
pounds in a redress package, it added.
"The agreed redress package reflects the harm caused by
E.ON's extensive poor sales practices carried out between June
2010 and December 2013," the regulator said.
Ofgem said it found no evidence that E.ON senior management
had deliberately tried to mis-sell to customers. Because E.ON UK
had agreed the compensation package, the regulator would only
fine the business a nominal 1 pound, it added.
"We are really sorry and want to make it absolutely clear
that we're putting this right," said E.ON UK CEO Tony Cocker.
"It is completely unacceptable that we may have been unclear
with customers about their tariff choices and as a result those
customers may not have made the best choices for them."
Since 2010, Ofgem has imposed nearly 100 million pounds in
fines and redress on energy companies for various rule breaches,
including 39 million pounds for mis-selling tariffs.
The payouts will further damage the already rock-bottom
reputation of the UK energy supply industry, and come a month
after British Gas-owner Centrica was ordered to pay
about 5.6 million pounds for blocking some business customers
from switching supplier.
In December, RWE npower agreed to pay 3.5 million
pounds to vulnerable customers for giving them inaccurate
information between 2010 and 2012.
Regulators said in March that public trust was so low and
competition was so weak in the sector that a full anti-trust
investigation was required.
($1 = 0.5954 British Pounds)
(Reporting by Michael Szabo and Paul Sandle; Editing by Mark