British Gas forced to pay £1m to customers for mis-selling

Sales staff misled customers by wrongly telling them they would save money by switching energy provider

(Getty Images)

Energy giant British Gas will have to pay back £1m to its customers after it mis-sold them energy deals.

The company’s sales people misled customers in Sainsbury’s stores and Westfield shopping centre in London by telling them they could save money by switching. But many paid more with Sainsbury’s Energy or British Gas than they would have if they had remained with their current supplier.

Some 4,300 customers who were mis-sold and been tracked down have been handed an average compensation payment of £130, meaning British Gas has had to give back £566,000.

It has also been forced to hand £434,000 to the British Gas Energy Trust for some 1,300 ex-customers that it hasn’t been able to track down. That cash will used to directly benefit customers.

Ian Peters, managing director of British Gas Residential, was quick to apologise for the latest mis-selling scandal. “We are very sorry and have ensured no customer will be out of pocket as a result.”

But Which? executive director Richard Lloyd said the apology was far too late. “One of the reasons consumer trust in the energy industry is so low has been because of the repeated mis-selling scandals,” he pointed out. “This kind of poor practice is completely unacceptable.”

Jeremy Cryer, energy spokesperson at Gocompare, said: “£1,000,000 is a drop in the ocean to British Gas owner Centrica, which made a £2.7bn profit last year.

This is another blow to public trust for the best known name in the UK energy industry at a time when energy companies are already facing an investigation by the Competition and Markets Authority.”

Mr Lloyd warned the energy giants that they need to clean up their acts now, rather than wait to be forced to do so by the regulators.

“We want to see all energy companies raising their game now, rather than waiting for the outcome of the competition inquiry,” he said. “At the very least that means big improvements to basic practices and customer service.”

Ofgem backed up the warning. Sarah Harrison, senior partner in charge of enforcement said: “We expect all suppliers to put this poor behaviour behind them and start acting in a way that will help consumers trust energy suppliers. Where they don’t, we will act.”