EDF to pay out £4.5m after misleading customers
9 March 2012
by Luke Thomas
The energy supplier EDF is to pay out £4.5m due to a failure to meet energy regulator Ofgem’s marketing standards.
Ofgem introduced stricter regulations in 2009, and a recent 18 month investigation found that EDF was falling short in a variety of categories. While EDF attributed the failings as being down to salesmen who were not acting according to the ethos of the company, the end result was that many people were victims of mis-selling on the company’s part.
Among their breaches of their marketing license were a failure to divulge full details of contracts when they were being sold to customers, and claims by some telesales staff that potential customers could save money by switching to EDF when they had no way of knowing if this was true.
Ofgem did, however, praise EDF’s handling of these issues, claiming that the firm “took the initiative” to deal with the problems as they came to light. EDF also organised their payout so that £3.5m of the £4.5m total would be paid back to some of their most “vulnerable” customers, mostly pensioners who were eligible for energy rebates last winter.
This package is to be paid instead of a fine, where the latter would have meant that the money went to the Treasury rather than to EDF customers who may have been hurt by their mishandled marketing.
EDF’s Martin Lawrence stated “We are obviously disappointed that we failed to live up to the high standards that we expect of ourselves. As soon as the issue was identified we immediately took action to satisfy ourselves that we are fully compliant.”
The EDF payout is the latest development in Ofgem’s investigation into the four largest energy suppliers in the UK, though they stressed that this should not be taken as a sign that any of the other firms were in breach of regulations.