Ofgem opens probe into SSE’s ‘cheapest tariff’ messaging
Suppliers are required to tell customers how much they could save by switching to their cheapest tariff.
SSE had little respite as Ofgem closed one ongoing investigation into the energy firm but opened another around its “cheapest tariff” messaging to prepayment customers.
As part of annual statements to customers, suppliers are required to detail which tariff customers are currently on, provide information on their annual spend, as well as how much they could save by switching to the supplier’s cheapest tariff, if they are not already on it.
Ofgem said in a statement that “the investigation will examine whether SSE failed to provide accurate information about the cheapest tariffs that customers could switch to and make savings”.
News of the latest probe comes just as Ofgem announced that it had closed an earlier investigation into SSE’s practices in switching some customers to prepayment meters.
The investigation – which launched in July 2016 – related to around 1,800 customers who had prepayment meters installed between August 2014 and January 2015, Ofgem said.
The watchdog found that SSE failed to take some customers through the “appropriate processes” before organising the installations, including providing struggling customers with an option to have energy charges deducted from their social security benefits, or clearly detailing the disadvantages of switching to prepayment meters.
However, Ofgem closed the case without taking formal action, in light of the fact SSE had made efforts to “improve its performance” and the “relatively small number of customers affected”.
SSE has since revamped its training and call monitoring processes and offered to compensate 337 customers around £29 each on average for being forced to pay more as a result of switching to prepayment metering, Ofgem said.
Some switched customers have also been offered to have a credit meter installed at zero cost.
SSE shares were down 6p at 1,340p in early afternoon trading.
SSE made headlines earlier this month when it announced that it had reached an agreement with Npower’s parent company, Germany’s Innogy, to merge their household energy supply and services business in Britain, turning the Big Six energy suppliers into five.
The new company will be listed on the London Stock Exchange, with SSE shareholders holding 65.6% and Innogy 34.4%.
Shareholders in SSE will vote on the deal by July next year, while Innogy has committed to seek the approval of its supervisory board by the end of 2017.
It comes as Britain’s biggest energy firms brace for a raft of regulatory changes after the Government announced last month that a price cap will be imposed on poor-value energy tariffs.