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British Gas to pay out £1m for mis-selling

Staff made false claims about energy bill savings

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British Gas has agreed to pay out £1m for mis-selling to energy customers over a two-year period.

Between February 2011 and March 2013, British Gas sales staff in Sainsbury’s stores and Westfield shopping centre, Shepherds Bush, exaggerated the savings prospective customers would be able to make on their energy bills. 

Staff compared prices for paying by monthly direct debit with paying by every quarter – not a like-for-like comparison. 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 if they had remained with their existing supplier.

Staff and branding in Sainsbury’s stores also failed to make it clear that British Gas was the supply partner for Sainsbury’s Energy.

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Energy companies must raise their game

Which? executive director Richard Lloyd said: ‘One of the reasons consumer trust in the energy industry is so low has been the repeated mis-selling scandals. This kind of poor practice is completely unacceptable.

‘We want to see all energy companies raising their game now, rather than waiting for the outcome of the competition inquiry. At the very least, that means big improvements to basic practices and customer service.’

Payout for affected British Gas customers

The £1m payment includes £566,600 paid directly to 4,300 customers who were potentially mis-sold to, and £434,000 to the British Gas Energy Trust – which the energy company said would go towards helping vulnerable customers.

Ofgem said that because British Gas had acted promptly to correct these issues once aware of them, Ofgem would allow the £1m in consumer compensation to be paid out in lieu of opening a formal investigation.

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