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Investigation into npower 'mis-selling' launched

23/04/2008

Energy regulator Ofgem is to launch an investigation into claims of mis-selling at npower.

The investigation follows allegations that npower sales representatives have been mis-selling energy contracts to customers.

Ofgem's probe will look at the training and selecting of sales staff, if customers are being made fully aware they are entering into a contract, and if npower contacted customers within 14 days of signing a contract to confirm they are happy to proceed.

The maximum penalty npower could potentially face would be up to ten per cent of its worldwide profits.

The firm's profits released in February stood at £544 million, a rise of 41 per cent.

Npower has stated it will co-operate with the investigation, and claims the problem only concerns a small number of staff – as highlighted in a Sunday Times undercover investigation earlier this year.

"We took swift action to take the team off the road and investigate the problem," said an npower spokesperson.

"Following an in depth investigation by our Audit team, disciplinary hearings have been scheduled for later this week. We cannot prejudge the outcome of these meetings but the penalty for fraudulent activity is dismissal."

He added: "We have also taken steps to confirm that the systems in place currently are working effectively and we have taken the entire npower sales force off the road to reinforce the standards that we require.

"We have also introduced additional procedures across the whole sales force which reinforce our current processes."

The regulator was unwilling to comment further about the investigation for fear of prejudicing the case.

Figures from consumer watchdog Energywatch reveal average gas bills have risen 108 per cent since 2003 and electricity bills have increased 70 per cent – leading 5.1 million households to change suppliers in 2007.

In February Ofgem also launched a probe into the levels of competition in the energy market, following customer concerns that the big six energy providers all increased bills by similar amounts over the same time period.

It is also hosting a summit today into fuel poverty, with as many as one in five UK households now paying more than ten per cent of their income on fuel costs.