Ofgem secures £1 million payment by British Gas for mis-selling

Publication date
4th July 2014
Information type
Policy area
  • British Gas mis-sold to customers in Sainsbury’s stores and Westfield shopping centre
     
  • Ofgem welcomes package which delivers £566,000 direct compensation to affected customers and £434,000 to help vulnerable customers via the British Gas Energy Trust

Ofgem has secured a £1 million package from British Gas after they mis-sold to customers in Sainsbury’s stores nationwide and in Westfield shopping centre, Shepherds Bush. In addition, staff and branding in Sainsbury’s stores did not make clear that British Gas was the supply partner for Sainsbury’s Energy.
 
Between February 2011 and March 2013, British Gas staff in Sainsbury’s stores and Westfield shopping centre made exaggerated savings claims to prospective customers. Sales staff did not compare tariffs on a like for like basis, comparing monthly direct debit with quarterly payment methods to produce inaccurate savings estimates. In some cases, customers were told that they would save money by switching, but in fact they paid more with Sainsbury’s Energy or British Gas than they would have paid if they had remained with their current supplier.
 
British Gas has identified customers who were potentially mis-sold to and has made an average payment of £130 to 4,300 affected customers. It was unable to contact around 1,300 ex-customers and this compensation is part of the £434,000 that will go to directly benefit customers via the British Gas Energy Trust.
 
Sarah Harrison, Senior Partner in charge of enforcement said: “Ofgem welcomes British Gas’ action to tackle its sales failures and compensate customers quickly when it became aware of mis-selling.
 
“Ofgem expects all suppliers to put this poor behaviour behind them and really start acting in a way that will help consumers trust energy suppliers. Where they don’t, Ofgem will act.”
 
British Gas became aware of this issue and reported it to Ofgem in April 2013. It took immediate action to correct the issues. Given British Gas’ prompt action, Ofgem has decided to accept this consumer package in lieu of opening a formal investigation.
 

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1. About British Gas Energy Trust
 
The British Gas Energy Trust provides grants and assistance to clear energy debts and repair or replace essential household items such as energy efficient boilers, fridges and washing machines. Although fully funded by British Gas, people don’t need to be British Gas customers to be eligible for support. You can find more information via British Gas Energy Trust.
 
2. About Ofgem

 
Ofgem is the Office of the Gas and Electricity Markets, which supports the Gas and Electricity Markets Authority, the regulator of the gas and electricity industries in Great Britain. The Authority's functions are set out mainly in the Gas Act 1986, the Electricity Act 1989, the Competition Act 1998 and the Utilities Act 2000. In this note, the functions of the Authority under all the relevant Acts are, for simplicity, described as the functions of Ofgem.
 
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