Energy company E.On has been fined £12 million for a series of mis-selling practices.
The energy regulator, Ofgem, ruled that E.On had engaged in widespread mis-selling practices between June 2010 and December 2013.
Customers were misled by sales staff, including phone operators and doorstep salesmen, the regulator said.
Staff provided incorrect information to customers, meaning that some could have potentially signed up to more expensive deals than they were already on at the time.
Sales staff also failed to reiterate the key terms of a contract before the customer agreed to sign.
The regulator found wider systemic failures within the company, including a lack of training for its own staff.
E.On failed to monitor its selling agents’ behaviour and regularly overlooked selling rules for the energy industry, it said.
Ofgem said that E.On had been given plenty of opportunities to improve its sales practices prior to 2013, but little progress had been made.
Consequently, it faces the largest fine levied against an energy supplier in the UK, topping the £10.5 million fine issued to SSE last year for extensive mis-selling practices.
E.On apologised to customers following the ruling and has pledged to compensate customers who believe they were mis-sold an energy deal during the period.
It believes that the cost to the business could total £20 million once compensation payments are factored in.
Tony Cocker, the chief executive of E.On UK, said he was “absolutely devastated” by the ruling, but added that the company would seek to put right its wrongs.
The company will now write to around half a million customers to inform them about the complaints procedure if they believe they were mis-sold a contract.
Meanwhile, the £12 million fine will be distributed between low-income customers who receive the Warm Home Discount. These will now receive £35 each, even if they were not affected by the scandal.
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