British Gas f aces £1m payout for mis-selling in Sainsbury’s name

BRITISH Gas used the trusted name of Sainsbury’s to mis- sell energy deals to thousands of families, it emerged yesterday. Salesmen working for the firm made exaggerated claims to shoppers about how much they could save by switching.

Now the energy giant faces a £1million payout to customers after regulator Ofgem accused it of ‘poor behaviour’.

Sainsbury’s offers electricity and gas tariffs under the brand Sainsbury’s Energy, but the service is provided by British Gas.

Until last year, employees of the energy firm worked in the supermarket’s stores – i ncluding outlets in Scotland – wearing its uniforms and operating under the retailer’s name.

The power company’s branding did not appear on their name badges, uniforms or promotional literature – meaning customers did not know immediately that they were signing up to British Gas. Placed near the doors, sales staff approached shoppers as they arrived, telling them they could make large savings by switching energy suppliers.

Consumer groups had warned about the practice, which catches customers off guard because they do not have their current bill to hand to compare.

As a result, many ended up payi ng more after switching to Sainsbury’s Energy.

More than 5,000 customers were duped by the practices, Ofgem said yesterday.

Sarah Harrison, head of enforcement at the regulator, said: ‘ Between February 2011 and March 2013, British Gas staff in Sainsbury’s stores and Westfield shopping centre made exaggerated savings claims to pro- spective customers. Sales staff did not compare tariffs on a likefor-like basis … In some cases, customers were told that they would save money by switching, but in fact they paid more with Sainsbury’s Energy or British Gas than they would have paid if they had remained with their current supplier.’

British Gas, which trades as Scottish Gas north of the Border, will now pay an average of £130

‘Completely unacceptable’

compensation to 4,300 families – a total bill of £566,000. Another 1, 300 customers who were affected could not be reached by the company – so it will pay a further £434,000 to a fund for vulnerable customers. Marks & Spencer has been caught up in a similar scandal, after it was accused of mis-sell- ing energy from power firm SSE. Last year the Daily Mail revealed staff working in M&S stores were earning up to £3,000 a week from signing up customers with promises of lower bills.

The six largest energy providers – British Gas, SSE, EDF, EON, Scottish Power and Npower – are facing a two-year investigation by the Competition and Markets Authority over allegations they used their dominance to push up prices.

Richard Lloyd from consumer group Which? said: ‘This kind of poor practice is completely unacceptable. We want to see all energy companies raising their game now, rather than waiting for the outcome of the competition inquiry.’

Ian Peters, managing director of British Gas, said: ‘ We are very sorry and have ensured no customer will be out of pocket.’

A Sainsbury’s spokesman said the energy firm no longer signed up customers in its stores.