No excuses says E.ON chief as energy giant to pay £12m penalty for mis-selling

E.on is to pay £12 million to vulnerable customers as part of a redress package after an Ofgem investigation found the company broke energy sales rules

The German-owned business has become the latest of the Big Six energy firms to be punished for mis-selling and also faces a bill of between £3m and £8m for compensating those affected by the poor sales practices.

The company has asked 465,000 people to contact it because it believes they may have received the wrong information when choosing their energy tariff. The average payment to those affected is likely to be around £67.

Regulator Ofgem said E.ON failed to properly train and monitor its staff and those it employed through third-party telesales agencies, leading to incorrect information being provided to customers on the doorstep and over the phone.

Some of the breaches continued until last December, despite earlier pledges from E.ON that it would make changes and improvements to its processes.

E.ON UK chief executive Tony Cocker saw his bonus cut by 26 per cent last year as a result of the failings but has said he won’t resign.

Mr Cocker said that as part of overhauling its sales operations the company had ended face-to-face sales and outbound residential telephone cold calling.

He added: “It is completely unacceptable that we may have been unclear with customers about their tariff choices.

“There was no organised attempt to mislead, and Ofgem has acknowledged this, but that does not excuse the fact we did not have in place enough rules, checks and oversight.”

Rather than pay the penalty to the Treasury, E.ON will hand around £35 to 333,000 of its customers who are normally recipients of the Warm Home Discount.

Energy Secretary Ed Davey said: “It’s right that if energy companies aren’t fair to their customers, then they’re penalised – and their customers benefit.”