Energy companies must compensate for mis-sellingSelect committee gets tough on energy companies

25 July 2011

compensation for mis-selling

Energy companies should compensate customers who have been mis-sold energy tariffs.

Which? is supporting the Energy and Climate Change Select Committee today as they demand that energy companies, found guilty of mis-selling, should be forced to compensate their customers.

Figures from Ofgem suggest that up to 40% of customers who switch do not end up with a better deal. Executive director of Which? Richard Lloyd said: 'It's only fair that people who have been persuaded to switch to a worse deal should be compensated by their energy company.'

Which? is calling for extra protections and clear rules about compensation for consumers who have been mis-sold an energy tariff. 

EnergySure Code

EnergySure is a voluntary code of practice for energy companies and currently has some consumer protections built in. However, Which? believes that energy companies should go further to help consumers by:

  • Guaranteeing that the rate new customers sign up for will be the rate that they actually pay. 
  • Giving customers the right to get out of a tariff that has been mis-sold.
  • Offering compensation or the difference back if a customer is found to have been mis-sold.

Richard Lloyd added: 'Extra protections for consumers should be built into the EnergySure Code, but ultimately if that doesn't work, Ofgem will have to step in to make sure that mis-selling is wiped out once and for all.' 

Ditch the tactics

Tim Yeo, chairman of the Energy and Climate Change select committee, has been leading the charge on energy company mis-selling. In a statement accompanying the select committee's report, he said:

'If it turns out that consumers are being persuaded to switch contracts when it's not in their best interests, by salespeople keen to earn commission, then it would only be right for the energy companies to cough-up compensation.'

He added that the 'big six' should 'ditch the Del Boy sales tricks'.

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Which? campaigns to make people's lives fairer, simpler and safer. We're currently campaigning on energy issues such as the Green Deal, confusing energy tariffs, and smart meters. To find out more about our campaigns, follow Which? Action on Twitter or facebook.

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