Ofgem inquiry into alleged mis-selling

Ofgem, the energy regulator, began a formal investigation yesterday into alleged mis-selling of energy contracts by npower, one of Britain's top six power suppliers.
The inquiry comes after claims that sales representatives of npower - which has 6.8million customers and is owned by RWE, the German utility group - had lied to customers and used illegal practices to sell contracts.
The alleged tactics included exploiting customers with a poor command of English, making people sign forms without revealing that they were contracts and lying about charges.
If found guilty, Ofgem can impose a maximum fine of 10 per cent of RWE's global turnover, which was €42 billion (£33billion) in 2005.



Two weeks ago, Ofgem began an inquiry into alleged market abuse by ScottishPower and Scottish & Southern Energy. In February, it began a competition review and also fined National Grid £42million.

Npower said that it planned to co-operate fully with the Ofgem investigation and that it was “very concerned” about the claims. It said that several staff had been suspended pending disciplinary hearings.

News of the inquiry will infuriate npower's customers, who in January became the first to be hit by the latest round of fuel price rises when the company introduced bill increases of up to 17 per cent.