ScottishPower agrees to pay consumers £8.5m following Ofgem sales investigation

  • Ofgem found ScottishPower breached its marketing licence conditions
  • ScottishPower will pay £7.5 million to benefit vulnerable customers and establish a £1 million customer compensation fund
  • ScottishPower’s actions today represent an important step by the company to re-establish consumer trust 

Ofgem’s investigation found that ScottishPower breached its marketing licence conditions, and the company has agreed to pay an £8.5 million package that will directly benefit vulnerable consumers and compensate consumers that were misled.

Ofgem’s investigation found that ScottishPower did not have in place appropriate management arrangements to adequately train and monitor their doorstep and telesales agents. This resulted in misleading information being provided to customers during sales approaches.

ScottishPower has accepted these failings, which have now all been rectified. ScottishPower stopped doorstep sales in 2011 and has put in place independent checks on the conduct of their telephone agents in all new sales. Had this not been the case the company would have faced a higher penalty.

The size of the payment reflects the impact of the sales practices on consumers and it also recognises ScottishPower’s cooperative engagement with Ofgem to put right their processes. Ofgem’s investigation found no evidence of a strategy by ScottishPower to deliberately mis-sell to customers.

Ofgem’s Senior Partner in charge of enforcement Sarah Harrison said: “Ofgem welcomes ScottishPower’s recognition of its failure to comply with the energy sales rules which are there to protect the consumer. This is an important step forward and demonstrates a commitment by ScottishPower towards re-establishing consumer trust.

“Today’s announcement is a clear signal to energy suppliers of the consequences of breaching licence obligations and of the importance of taking action to put things right for consumers when they go wrong.

“Ofgem’s retail market reforms, backed by enforcement action, will create a simpler, clearer and fairer energy market for consumers. Now it is time for suppliers to put these changes into action and rebuild consumer trust.”