E.On Compensation: Energy Giant Fined £12m For Mis-selling

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E.On Energy is the latest of the ‘Big Six’ energy suppliers to be caught up in a mis-selling scandal. On the 16th of May 2014, market regulator Ofgem fined the energy giant, and ordered compensation be paid for the mass mis-selling of energy tariffs.

An Ofgem investigation revealed that E.On’s sales team were not providing correct information to customers when selling energy tariffs. Although Ofgem has recognised that there was no organised intention to purposefully mis-sell, the energy supplier is being penalised for failing to properly train its sales staff, and also for the absence of safeguards to ensure against mis-selling.

Who Will be Reimbursed?

333,000 vulnerable customers, who received E.On Energy’s Warm Home Discount Scheme, are set to receive around £35 each in compensation, amounting to around £12m in total for the energy company. 465,000 E.On customers will receive written notification that they may have been given incorrect information when selecting an energy tariff with the company.

The Penalty

As well as the £12m to be reimbursed to customers, Ofgem have issued a £1m fine. The amount is relatively nominal as Ofgem have stated that the money should go to affected customers rather than to the treasury.

The penalty and poverty package ordered by Ofgem could cost E.On up to £20m in total. E.On’s penalty is the largest ever to have been issued to and paid by a UK energy company. Ofgem has dealt around £100m worth of fines in the past (with around £39m for mis-selling), but never has a single fine been so large.

In a statement, E.On CEO Tony Cocker stated, “we will put this right,” and Ofgem has declared the energy giant’s willingness to accept responsibility and take steps to rectify the issue. E.On has already put a stop to its doorstep sales and cold calling, as well as setting up a dedicated helpline for customers entitled to compensation.

Protection from Mis-selling

This latest scandal from E.On provides yet another reason for customers to consider alternative energy suppliers. Compared to the Big Six, smaller suppliers tend to lead on price, as well as customer service. If you are worried about being mis-sold energy, you may be considering switching suppliers.

Try out UKPower.co.uk's switching service today to run a comparison, see if you could save money, and ensure your safety from energy mis-selling.

How to Claim Compensation from E.On

If you think you may have been mis-sold an energy tariff by E.On between between June 2010 and December 2013, then you can call E.On’s dedicated helpline on 0800 056 8497.

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By: Hannah Corbett - Home Energy Expert
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