E.On faces Ofgem investigation

published 4 April 2012

Energy supplier E.ON UK has become the fifth big energy company to be investigated by regulator Ofgem, which will determine whether the firm's staff have been using misleading methods to sell its products.

E.ON has described its response to the probe as disappointed, but said it would cooperate fully.

Speaking on behalf of the company, Sara Vaughan, said: "In recent months our procedures have been improved even further.

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"We will now work with Ofgem on their investigation and will seek to demonstrate that we have always acted in the best interests of consumers."

The investigation follows similar inquiries into possible mis-selling by sector peers Scottish Power, SSE, EDF and NPower.

"If we get evidence there is a potential breach of their energy supply licence we have a duty to investigate and take appropriate action, which could mean a fine if found guilty," Ofgem said.

No information has been given as to what evidence might be.

The investigation has been backed by watchdog group Consumer Focus which argues mis-selling in the sector has been an on-going problem and must be tackled "head-on", saying "while it is unclear what types of sales E.On may be suspected of misleading consumers on, we would hope this announcement will cause them to rethink ending doorstep sales".

In March E.On reported that its 2011 earnings halved due to nuclear reactor closures and lower earnings in power generation and gas. Sales last year rose 22% to €113bn, however, they were unable to offset a 50% drop in adjusted net income to €2.5bn, below the €2.3 consensus.