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Sainsbury’s Energy Hit By Mis-Selling Scandal

Sainsbury’s Energy Hit By Mis-Selling Scandal

British Gas is being forced to compensate thousands of customers for providing inaccurate savings estimates in the latest mis-selling episode to blight the utility sector.

Sky News has learnt that the UK’s biggest energy provider, which is part of the FTSE-100 group Centrica, is paying out around £500,000 to approximately 4,300 people who signed up to Sainsbury’s Energy and British Gas tariffs between February 2011 and March 2013.

Insiders said on Tuesday that British Gas had overstated the potential savings for consumers by providing inaccurate quotes for the following year’s gas and electricity bills.

Details of the compensation package are understood to have been agreed with Ofgem, the industry regulator, and are expected to be confirmed in a public statement in the coming days.
A source said that British Gas had notified Ofgem of the mistake itself, and that the watchdog was satisfied with the proposed remedy, which has seen customers’ accounts credited with average repayments of around £130.

The news comes days after the gas and electricity sector was referred by Ofgem to the Competition and Markets Authority for a full investigation.

The inquiry, which came in the wake of intense pressure from Ed Davey, the energy and climate change secretary, and Ed Miliband, the Labour leader, is unlikely to be completed until towards the end of next year.

Mr Miliband has sought to depict rising household energy bills as a central theme of the “cost of living crisis” that is likely to form the defining narrative of Labour’s General Election campaign.

Sainsbury’s Energy has operated in partnership with British Gas for several years, and has been in trouble with regulators before. Sainsbury’s being

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