EDF To Pay £4.5m After Misleading Customers

Energy firm EDF has agreed to pay millions of pounds to 70,000 vulnerable customers after breaching the terms of its licence.
The energy regulator said that EDF Energy's doorstep staff failed to provide potential customers with complete information during the sales process, for example on some contract terms or on the way in which their monthly direct debits had been calculated.

Ofgem also said that staff in EDF call centres made claims about savings before knowing their statements were accurate, and sometimes assumed that the customer was on a standard tariff without checking.

The settlement means that EDF will set aside £3.5m for a £50 refund to about 70,000 customers who have received its Warm Homes Discount.

It will also be making a £1m donation to an energy awareness campaign run by Citizens' Advice.

EDF said it acknowledged "limited shortcomings" in some elements of its sales processes during 2010 but has stressed that the settlement is not a fine.

It also pointed out that as soon as breaches came to light, swift action was taken.

Martin Lawrence, managing director of energy sourcing and customer supply, said: "We're 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're fully compliant."

Ofgem said customers would be better served by EDF making payments to benefit those customers in need, rather than imposing a fine.

It said that by accepting some shortcomings in its sales practices EDF had escaped a bigger penalty.

Sarah Harrison, Ofgem's senior partner in charge of enforcement, said: "In the energy market in general much more needs to be done to restore consumer confidence and all energy suppliers should now get behind Ofgem's reforms to introduce a simpler, clearer and more competitive energy market."

Meanwhile, the most recent quarterly energy complaints data compiled by Consumer Focus, showed that EDF Energy remained the worst performing supplier out of the 'big six'.

Audrey Gallacher, director of energy at campaign group Consumer Focus, said: "EDF Energy has made some headway on addressing its problems but it is disappointing that the company remains firmly on the bottom of the league table again.

"A line needs to be drawn under these issues so the company's customers know they have a service they can rely on."

Ofgem said said it was continuing its investigations into sales practices at Scottish Power, SSE and npower.