UK energy watchdog starts probe of E.ON-Age UK partnership

LONDON (Reuters) - Britain’s energy regulator said on Thursday it has started gathering information about E.ON’s practices in gaining new customers through a partnership with charity Age UK, following a request from the energy minister.

E.ON’s UK subsidiary has paid charity Age UK, which supports elderly people, 6 million pounds a year in a partnership that promotes higher-priced tariffs, according to a report in The Sun newspaper.

“We’re gathering facts at this stage,” said a spokeswoman for energy regulator Ofgem.

The watchdog started the process after it was contacted by Secretary of State for Energy Amber Rudd who said she was concerned pensioners were being misled.

“I take very seriously this allegation that Britain’s pensioners are being misled, so immediately contacted Ofgem who will now investigate this urgently and report back to me,” she said in a statement.

E.ON confirmed it has had a commercial relationship with Age UK for several years.

“Our current Age UK tariff was the cheapest product of its type in Britain when it was launched,” a spokesman said, adding that all customers are able to choose any of its tariffs on offer.

“We strongly reject the allegations and interpretation of figures,” a spokeswoman for Age UK said. She added that the charity’s 14-year relationship with E.ON had helped it maintain its level of charitable work.

The marketing practices of Britain’s energy suppliers are under close scrutiny after several cases of improper conduct which led to Ofgem imposing hefty fines.

Supplier RWE npower was fined 26 million pounds last year after it was found to have overcharged customers and improperly handled customer complaints.

In 2013, supplier SSE was fined 10.5 million pounds for mis-selling tariffs to customers over the phone, at the doorstep and in stores.

($1 = 0.6856 pounds)

Reporting by Karolin Schaps; editing by Adrian Croft