Energy supplier trusted by Ofgem is fined over mis-selling
Ofgem has penalised a small energy supplier for mis-selling only months after entrusting it to take on 10,000 customers from a defunct rival.
Green Star Energy has agreed to pay £679,283 in compensation after Ofgem received a tip-off that it was signing up new customers via a misleading page on a price comparison website. The payout also covers the supplier’s admission that it had failed for three years to issue annual statements that it was obliged to send to households setting out their usage and the savings they could make by switching. Ofgem’s disclosure of the payout raises questions over its decision in January to select Green Star Energy to take on 10,000 customers of Future Energy, which had ceased trading.
The regulator said at the time that it had chosen the supplier to “to get the best deal possible for Future Energy’s customers”. Green Star Energy was founded in 2013 and supplies about 300,000 households. It is owned by Just Energy Group, which is listed in New York and Toronto and owns suppliers in North America, Europe and Japan.
Ofgem said that there were “no ongoing investigations” into Green Star at the time it chose the supplier to take on Future Energy’s customers. It was alerted to the mis-selling in February and Green Star self-reported the annual statements failing in March. It said that 8,815 customers had been compensated after signing up to Green Star through the misleading website between January 25 and May 25, meaning that the mis-selling had continued months after it was reported.
Green Star Energy’s appointment had already raised eyebrows. Data from Citizens Advice shows the supplier was ranked in the bottom half of customer service league tables at the time it was chosen and its performance was deteriorating. It received a rating of 2.2 out of 5 for its performance between last October and March. Ofgem said it had considered factors including customer service when it chose the firm. A spokesman for Green Star Energy said it aimed to “provide attractive products to energy consumers and world-class customer service”.
News source: The Times