EDF Energy has paid ?4.5 million following breaches over providing clear information to customers
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Friday, 09 March 2012 10:17
EDF Energy has agreed to pay ?4.5 million for breaching some of the regulations that govern the way products can be sold to vulnerable customers.
An Ofgem investigation found that some aspects of the licences governing the information it provides to customers when selling products had not been followed. The information on contract terms and how annual consumption is calculated had not been complete.
EDF Energy will pay around 70,000 of its most vulnerable customers ?50 each in what will be the biggest total payment made following an Ofgem investigation. EDF Energy denies that it is a fine and believes that it has worked together with the regulator to make sure its sale processes improve and become fully compliant.
Martin Lawrence, Managing Director, Energy Sourcing & Customer Supply at EDF Energy, said ?We?re obviously disappointed that we failed to live up to the high standards that we expect of ourselves. As soon as the issue was identified we immediately took action to satisfy ourselves that we?re fully compliant.?
Ofgem said it had agreed to the package of measures worth ?4.5 million from EDF Energy instead of imposing a larger fine that would have gone to the government.
The proposal from EDF Energy means that 70,000 households, most of whom receive Pension Credit and the Warm Homes Discount will all be refunded ?50 each. EDF will also make a ?1million payment to the Citizens Advice Energy Best Deal campaign.
Ofgem?s Senior Partner in charge of enforcement Sarah Harrison said: ?EDF Energy has done the right thing by stepping forward and recognising there were weaknesses in its sales processes. The firm also took the initiative to correct these problems during Ofgem?s investigation.
Ofgem is continuing to investigate other energy companies Scottish Power, Scottish and Southern Energy, and Npower, though there is no suggestion that these companies have breached regulations at this stage of the investigation.
Ann Robinson, Director of Consumer Policy at uSwitch.com, said: "Today's announcement marks a real turnaround in thinking in the energy industry. Both EDF Energy and Ofgem are to be applauded for taking such a grown up, constructive and responsible approach. Instead of simply slapping down a fine, both have worked together to tackle the issue and to then agree a penalty that will actually help consumers.?
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