SSE faces record £10.5m fine

Energy watchdog Ofgem said it found “failures at every stage of the sales process” across SSE’s telephone, in-store and doorstep selling activities.

SSE provided “misleading and unsubstantiated statements” to potential customers about prices and savings that could be made by switching to SSE, according to Ofgem.

Ofgem said the level of the fine reflects the seriousness and the duration of the mis-selling, as well as the harm caused to customers and the likely gain to SSE.

Management at SSE - one of Britain’s “big six” energy suppliers - failed to pay enough attention to compliance, which allowed the mis-selling to take place, added Ofgem.

Ian Marlee, managing director for markets at Ofgem, told the BBC Radio 4 Today programme: “This is a woeful catalogue of failures by the SSE management.

“This fine represents the fact that what they were doing was allowing a culture of mis-selling to continue, they weren’t doing enough to prevent sharp selling practices from their selling agents, they actually provided misleading sales scripts.

“Some people were being told they were going to get savings when actually they were being put on a worse deal. People were expecting savings and were not getting the levels of savings, people were being told direct debit levels that made it sound like they were going to be better off when in fact they were worse off.

“What we need and what we expect from energy companies is they have a culture of putting consumers first and complying with the rules.

“Clearly SSE management were not doing that which is why we imposed the largest fine on energy suppliers we have ever imposed.”

The fine will be paid to the Treasury, Mr Marlee said.

SSE corporate affairs director Alan Young said the firm was “very sorry” about the breaches of the rules.

He told the BBC Radio 4 Today programme: “What we were doing was not adequately telling people about the terms and conditions of their contract or adequately making sure they had the information they needed to switch.

“In July 2011, we were the first energy supplier in Britain to stop selling energy on the doorstep.

“We have set up an independent compliance unit to make sure, to monitor, to audit, to randomly check energy sales across all channels now so customers can have the assurance when they are dealing with us there are safeguards in place and proper structures.

“We have totally reformed our business in this area, we have restructured it.”

Mr Young defended the management team still being in place, insisting SSE was one of the “best companies in Britain”.

He said the firm invested more in the UK than it makes in pre-tax profits.