British Gas pays compensation to UK consumers

British Gas has agreed to pay £1m in compensation for making exaggerated savings claims to prospective customers in several shopping outlets in the UK.

The misselling took place at Sainsbury’s stores throughout the country and in the Westfield shopping centre in west London between February 2011 and March 2013.

UK energy regulator Ofgem said that sales staff did not compare tariffs on a like-for-like basis, comparing monthly direct debit with quarterly payment methods to produce inaccurate savings estimates. In some cases, customers were told that they would save money by switching, but in fact they paid more with Sainsbury’s Energy or British Gas than they would have paid if they had remained with their current supplier. Additionally, staff and branding in Sainsbury’s stores did not make it clear that British Gas was the supply partner for Sainsbury’s Energy.

An average of £130 compensation has been paid to 4,300 affected customers. The company was unable to contact arouns 1,300 affected customers, whose compensation will go into a fund to help vulnerable customers.

Ofgem senior partner in charge of enforcement Sarah Harrison said that the regulator welcomes British Gas’ move to tackle its sales failures and compensate customers quickly when it became aware of misselling.

"Ofgem expects all suppliers to put this poor behaviour behind them and really start acting in a way that will help consumers trust energy suppliers. Where they don’t, Ofgem will act," Harrison added.

British Gas became aware of the issue and reported it to Ofgem voluntarily in April 2013. It took immediate action to correct the issues and Ofgem accepted the £1m consumer package in lieu of launching a formal investigation.