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Charity Commission probes E.ON 'payments' to Age UK

Published 04/02/2016

E.ON is accused of paying Age UK millions to sign up elderly customers to expensive deals
E.ON is accused of paying Age UK millions to sign up elderly customers to expensive deals

The Charity Commission is looking at "any action that might be necessary" following claims that Age UK has been promoting expensive energy tariffs to the elderly in exchange for cash.

The Sun newspaper claims E.ON has paid out £6 million a year to Age UK in return for the charity pushing expensive tariffs to the elderly.

E.ON has confirmed there was a "commercial relationship" between it and the charity but the supplier said its tariffs were competitively priced and Age UK has rejected any allegations of wrongdoing.

The Charity Commission said: "The Commission is aware of concerns raised in the media regarding Age UK's partnership activities with E.ON.

"The Commission is in contact with both Age UK and Ofgem to determine what regulatory role the Commission might have and any action that might be necessary."

Earlier, shadow energy secretary Lisa Nandy called on the Charity Commission to investigate, saying: "When people have so little trust in energy companies it's important they can trust third parties, like charities, when they offer special deals.

"The Charity Commission should investigate whether Age UK has broken the rules because it's vital the public can have confidence in the good work charities do.

"It's more important still that ministers fix our energy market to make it more transparent and stop backroom deals, wherever they occur."

Ofgem also said it was "examining the claims", adding: "Ofgem rules require energy companies to treat consumers fairly when they are marketing and selling energy.

"Ofgem has a track record of punishing firms who mislead consumers and we will look at carefully at these claims."

Energy Secretary Amber Rudd said she was taking the allegations "very seriously" and had asked Ofgem to investigate further.

The Sun said it found details of E.ON payments to the charity contained within Age UK's annual accounts.

It is claimed the charity had been recommending a special E.ON tariff in leaflets and booklets, stating it was "great value" and "helps save energy and money".

Age UK has been paid at least £6 million every year, receiving around £41 for every person that signed up, it was reported.

It is claimed that the tariff, on average, costs pensioners £245 more than they would pay on E.ON's cheapest deal.

A spokeswoman for E.ON said: "Our current Age UK tariff was the cheapest product of its type in the UK when it was launched in January. Customers can switch between products at any time without incurring any costs.

"If a customer is on a fixed tariff and they opt in for a price alert, and if we issue a new tariff that is cheaper, we will automatically notify them of that.

"But in line with Ofgem's rules we can't switch people without their consent."

Currently there are around 152,000 customers on the deal - equating to a £37 million overspend by pensioners, The Sun reports - who last year typically shelled out £1,049 for fuel for 12 months.

In January Age UK criticised the big six energy firms for overcharging and warned that more than 4.1 million older people were "anxious" about high heating costs.

An Age UK spokesman rejected allegations that the charity has been pushing expensive tariffs and also the "interpretation of the figures".

The spokesman said: "Age UK has worked with E.ON for the past 14 years, openly and above board, and they have been generous supporters of our charity over and above the number of customers on the tariff.

"We launched the most competitive, fixed two-year energy tariff available anywhere on the market on January 20 this year, with no exit fees.

"Energy prices change all the time and we have always advised older people to look out for new good deals and we will continue to do so."

A Downing Street spokesman said: "As the Energy Secretary has set out, people expect a fair deal when it comes to their energy bills, and she has asked Ofgem to investigate these allegations and report back urgently.

"The fact that we have taken immediate action and asked Ofgem to investigate and report back urgently tells you that this is clearly an important allegation and one we need to get to the bottom of."

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