Investigation into compliance with obligations under the gas and electricity supply licences (Standard Licence Condition 25) - Notice of Decision

Opened:
Apr 2012
Decision Proposed:
May 2014
Closed:
Jul 2014
Company:
E.ON
Regulation Area:
Sectoral Regulations

The Authority has confirmed its decision to impose a financial penalty on E.ON following the investigation into E.ON’s compliance with Standard Licence Conditions 23 and 25 of its electricity and gas supply licence with respect to telephone and face-to-face sales activities.

By way of background, following the Energy Supply Probe, Ofgem put in place a new version of Standard Licence Condition 25 with a view to helping domestic customers make well-informed decisions in response to telephone and face-to-face sales activities. In particular, domestic suppliers are required to provide estimates and comparisons during face-to-face sales activities (with effect from 18 January 2010) and to secure the achievement of an objective in respect of both face-to-face and telesales activities (with effect from 21 October 2009). In summary, the Objective requires domestic suppliers to take all reasonable steps to ensure information provided is complete and accurate, understandable, appropriate and not misleading, and that sales activities are conducted in a fair, transparent, appropriate and professional manner.

The Authority found that E.ON has failed to comply with various of their obligations in this regard over a protracted period, from June 2010 to December 2013.

The Authority considered it appropriate to impose a penalty on E.ON. However, E.ON agreed to pay £12m in payments to vulnerable customers. The Authority considered that the payments offered by E.ON to aid consumers will be of greater benefit to energy customers than if a substantial penalty is imposed. Accordingly, the Authority decided that a nominal penalty of £1 should be imposed.