Npower under investigation for mis-selling

25 April 2008

Company faces probe over selling tactics

Ofgem, the energy market regulator, will be investigating energy company Npower over claims about its sales tactics.

The regulator announced the investigation after reports that sales representatives have been mis-selling energy contracts to unknowing customers.

Seventeen members of staff ewer suspended by Npower two weeks ago after claims of mis-selling were made by an undercover reporter because some sales staff were misleading prospective customers.

Npower has said that it will be co-operating with Ofgem during the probe.

In a short statement, Ofgem said: “The decision to investigate follows recent allegations that Npower sales representatives have been mis-selling energy contracts to customers.

“This investigation is being carried out under Ofgem’s powers to enforce licence conditions.”

The investigation is expected to take a number of months to complete, rather than weeks. If the probe finds Npower to be in breach of the rules, it could be fined as much as 10% of its global turnover.

In a statement, Npower said: “We were very concerned at the actions of a small number of individuals in a London sales team as reported in the Sunday Times.

“We took swift action to take the team off the road and investigate the problem. Following an in-depth investigation by our audit team, disciplinary hearings will be scheduled shortly.

“We cannot prejudge the outcome of these meetings but the penalty for fraudulent activity is dismissal.”

Npower have already taken action to prevent a future reoccurrence including bringing all of its sales staff in to be refreshed on the regulations, introducing a mystery shopper scheme and starting a call back system where 2000 people approached by Npower staff will receive a call to see if they were happy with the way they were dealt with.