Ofgem orders Scottish Power to pay customers £8.5m for giving them 'misleading information'

Regulator says the group provided inaccurate estimations and failed to monitor the activities of its sales staff

Energy giant Scottish Power has been ordered to pay £8.5 million in compensation to its customers after an investigation by regulator Ofgem found the group gave misleading information through its doorstep and telesales agents.

The watchdog said that, between October 2009 and January 2012, Scottish Power provided customers inaccurate estimations of annual charges and comparisons with their current supplier if they switched to the firm. It also failed to adequately monitor the activities of its sales staff, Ofgem said.

Scottish Power has now established a £1 million fund to compensate those affected, while the remaining £7.5 million will be paid to more than 140,000 vulnerable customers, who will automatically receive payments of around £50 each by December.

Scottish Power will contact 336,000 households that may have been mis-sold.

However, despite the sales practice failures, Ofgem said it found no evidence that Scottish Power had deliberately tried to mis-sell to customers.

The group stopped doorstep selling in June 2011 and has overhauled training and monitoring procedures for all telesales staff.

Scottish Power apologised "unreservedly" to those affected and said it had taken steps to address its failures.

Neil Clitheroe, Scottish Power's chief executive of energy retail and generation, said: "We accept Ofgem's findings and we apologise unreservedly to those customers affected.

"This arose as a result of new regulations which were introduced in 2009. I am sorry to say that we didn't implement these properly at that time."

Customers who believe they were affected can also contact the group on 0845 030 3048 or online at scottishpower.co.uk/salescompensation.

The probe into Scottish Power comes as part of a larger market inquiry into mis-selling across the energy industry, of which three investigations have already been carried out.

SSE was fined £10.5 million in April for "prolonged and extensive" sales practice failures.

Ofgem currently has two ongoing mis-selling investigations into npower, which was launched in 2010, and into E.ON, which was launched last year.

Additional reporting by Press Association