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E.On energy supplier to pay £12m for mis-selling

Energy giant E.On is to pay out £12m to some of its customers following an investigation into mis-selling by the industry regulator, the BBC has reported.

Ofgem said it was the largest penalty paid to date by a UK energy supplier.

Its investigation found “extensive poor sales practices” among staff selling on the doorstep and by phone.

E.On has apologised to its customers, and has promised to pay compensation to anyone who was mis-sold an energy package.

The company has estimated that the bill for compensation payments is likely to be between £3m and £8m, on top of the £12m penalty.

He told the BBC he took full responsibility for the failings, but would not comment on whether he might resign as a result, however he has agreed to give up his annual bonus.

The mis-selling took place over a three-and-a-half year period, between June 2010 and December 2013.

Customers were misled by sales staff, and some may have been sold more expensive tariffs than they were already on with other companies.

E.On was also fined by Ofgem in November 2012 for overcharging customers.

E.On was the last of the big six energy suppliers to stop doorstep selling, in September 2012.

It said it has now stopped all telephone cold-calling as well.

The £12m penalty will be distributed to 333,000 of the company’s poorest customers.

Those who receive the Warm Home Discount – pensioners, disabled people and low income families – will receive £35 each, even though they were not necessarily affected by the mis-selling. Other vulnerable customers will also receive automatic payments.

In addition, the company will be writing to 465,000 other customers to advise them how to complain if they believe they were the victims of mis-selling, or they can call the company directly, on 0800 0568 497.

The regulator said that E.On had opportunities to improve its sales practices long before 2013, but its response was inadequate.

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