From Herald, 4/4/13
Scottish and Southern Electricity has been charged £10m by Ofgem for mis-selling its gas and electricity. Apparently, its telephone sales people were bamboozling potential customers by giving them “misleading and inaccurate” information about prices. They also reported that the Pope is believed to be Catholic.
I'm sure action will be swift. Two years ago Ofgem castigated the energy companies for having 300 different tariffs. This year they have 900. Last month Ofgem reported that the energy utilities were raking in record profits of £110 per household, because wholesale energy costs were falling. So the energy companies announced that they were going to put their prices up even higher.
This is called regulation? Only in the same way that sub-prime mortgages were regulated. Ofgem insists that it is not in the business of setting prices – heaven forfend. Its job is to ensure a competitive market. Well if this is competition, I'd hate to see what a cartel would look like.
Perhaps Ofgem might get better results if it tried penalising the wrongdoers just a little more severely. Tapping them on the wrist and saying “naughty naughty” tends not to work in our high powered global business environment. £10m is about 0.003% of SSE's annual revenues which last year were over £30 billion. Do you think that this penalty is going to make them change their ways? SSE has form here and were found guilty of doorstep mis-selling in 2012 and fined £1.25m. Gosh, that must've hurt.
