If you've been mis-sold an energy contract or left majorly out of pocket due to an incorrect energy bill, you may be able to get £100s back.
Energy company mis-selling has been rife. Now it's time those left out of pocket got their cash back. This full step-by-step guide includes free template letters to get your money back - and possibly compensation on top.
Energy companies rack up profits faster than Lewis Hamilton's final Silverstone lap, but their customer service often falls short. If an energy company treats you unfairly, whether it's mis-selling or mis-billing, you have rights.
You could also get compensation on top of missed savings. The average payout is £135 if successful, but up to £10,000 can be awarded by the independent Energy Ombudsman.
British Gas recently announced it will pay £570,000 in total to 4,300 customers who were mis-sold tariffs between February 2011 and March 2013. It has also made available an extra £430,000 for the British Gas Energy Trust. The trust gives grants to applicants to help pay utility bills.
First, complain to your supplier. If you don't get any joy after eight weeks, take your complaint to the Ombudsman. Below are a few success stories (the second is from a member of the MSE team).
£670 back after calling up
Just gave E.on a call after reading the news story. After going through all the details, E.on said they are sending me a cheque for £672 and a letter of apology. Thank you MSE.
I got £200 back for a wrong transfer
I received a letter from my gas supplier EDF to say it was "sorry I was leaving them", but I hadn't applied to switch. I rang EDF immediately, but it was too late and the switch was already being processed.
After two months of an EDF 'investigation', it transpired I had been billed for my neighbour's gas as there was only one meter between us.
When a new family moved in downstairs and tried to switch to Scottish & Southern, they applied online. As my name was on the account, a letter was sent to me regarding the switch.
EDF ended up refunding me £212.32 as a gesture of goodwill for all the hassle (my electricity bill for the last seven months).
I got £250 back for mis-selling
A salesman told me I would be able to save by taking a dual fuel tariff. 12 months later, I realised my direct debit had increased by £60 per month and I was locked into the tariff due to exit fees.
After declining a £175 goodwill payment from the supplier, I went to the Ombudsman who decided the energy company failed to provide accurate information and mis-sold me. As well as not having to pay the exit fees, the Ombudsman awarded £250.
How far back can you go?
If you've noticed a problem and think you energy supplier has made a mistake, you've got 12 months to speak to it. If after this point you're still not getting anywhere, you can go to the Energy Ombudsman. You need to contact the Ombudsman within nine months of when you first reported the problem to your supplier.
There's no set timeframe for how far you can go back and the Ombudsman says if your supplier made a mistake two or more years ago, but you've only just noticed the error, it may be able to look into the complaint for you.
Never switch at the doorstep or on the phone
The big six energy firms have ceased doorstep selling. But if you're approached, don't switch on the doorstep or listen to energy sales pitches. Instead, use a comparison site to find the cheapest deal across the market. Switching can cut many people's costs by £100s, plus special links get up to £30 cashback or a crate of wine on top. See Cheap Gas & Electricity.
To deter unwanted sales representatives, print our Trading Standards-approved 'no cold callers' sign. If energy sellers don't obey, you can report them.
The energy mis-selling checklist
If any of the below happened to you, you may have been a victim of mis-selling.
Before we start, remember one thing. Switching energy is usually the best MoneySaving thing to do, but not via a doorstep sales rep. Read the Cheap Gas & Elec guide for full details on how to find the best deal yourself.
Did they switch you without your permission?
Did the salesperson ask you to sign something, saying it was the only way to give you a quote? Or were you told you were just signing to prove he or she had knocked on the door, and then you found yourself switched without further consent?
This is known as slamming. If it happens, both your existing supplier and new supplier have a joint responsibility to sort it out. You shouldn't have to pay anything to the new supplier.
If they've forged your signature, it's a criminal offence. You'll get compensation if it's proven.
What the rules say: Ofgem Licence Condition 25.5 c) ii says customers must understand they've entered into a contract.
Section 9 of the EnergySure code also states consumers must understand "they are entering into a contract to transfer their energy supply" and when customers are signing a contract, it must clearly have the word CONTRACT visible.
If they didn't understand they were switching supplier, it says they should cancel the contract and may be entitled to money back or compensation.
Did they lower the direct debit to make it seem cheaper?
Sales staff may ask you how much you currently pay for energy per month and simply set your direct debit at a lower amount to encourage you to switch. This doesn't mean you'll pay less for your energy overall.
Direct debits can be set at any amount, depending on how much energy your supplier thinks you'll use. All that happens with a low direct debit is you'll have to catch up later in the year.
If a salesman tells you you'll pay less and you end up paying more, this could be deemed as mis-selling by the Ombudsman.
What the rules say: Ofgem Licence Condition 25.1 a) states information given to the customer should be complete and accurate, and not mislead the customer.
Licence Condition 25.6 says if the sales rep tells you the new contract will be cheaper than what you pay now, he or she has to provide you with a comparison based on your current usage and costs. If that isn't possible, you should be given a best estimate.
Case studies from the Ombudsman suggest setting a low direct debit in order to get you to switch is viewed as misleading.
Did they say "Martin Lewis recommends us" or "Ofgem sent us"?
We've been inundated with reports that sales staff have quoted MSE or Martin to encourage switching. Some say Ofgem, the independent regulator, has sent them.
MSE would never single out one energy company and name it as cheapest for everyone. The cheapest provider depends on where you live and how much energy you use. We always suggest using comparison sites. Salesmen are not allowed to use these incorrect lines to get you to switch.
What the rules say: The law says a contract may be set aside for misrepresentation. So this means if you've been led into a contract due to a false statement of fact (not opinion), you may be entitled to cancel the contract and get possible damages as well. Whether the misrepresentation was negligent, deliberate or innocent doesn't matter.
Were you sold a fixed, capped or tracker tariff that wasn't explained?
A fixed tariff means you pay a set amount per unit of energy, regardless of whether prices increase or decrease. Capped tariffs promise not to go above a certain limit and tracker tariffs usually follow just above or below standard rates (which, in turn, are decided by the supplier).
Were you sold a fixed or capped tariff but it wasn't fully explained what it was or how it worked? Were you told that your prices wouldn't rise on a tracker tariff?
What the rules say: Ofgem's licence conditions state every energy supplier must provide information that is easily understood and doesn't mislead customers. Fixed and capped tariffs aren't straightforward and aren't suitable for everyone.
So if a sales rep hasn't properly explained how a fixed or capped tariff works, you may be able to get compensation.
Were you not told about cancellation fees?
Many energy tariffs now have cancellation fees if you leave it before the contract's due to end. These can be anything from £20 to £50 per fuel.
Sales staff have a duty to tell you about these before you sign up for a new contract. If they didn't do this, you may be due compensation.
What the rules say: Section 9.4 of the EnergySure code says sales agents must take all reasonable steps to ensure consumers know they can cancel or terminate the contract, including any charges or loss of benefits this may cause.
Did they not tell you how much you'd pay on the new tariff?
If you're signing up to a new contract, sales staff must provide an estimate of the cost of the new tariff there and then. In most cases you should also get a comparison against your existing tariff. If they're claiming you'll pay less, they must provide a comparison based on either info you provide, or their best estimate.
What the rules say: Ofgem's licence condition 25.6 a) says the representative must "provide, in writing or by means of electronic display, an estimate of the total annual charges for the supply of electricity".
Did they tell you about the cooling-off period and how to cancel?
When you sign up for a new energy tariff online, over the phone or at your doorstep, you must be given at least a 14-day cooling-off period, which means you can cancel within 14 days. At the time you sign the contract, you must be given written notice of that cooling-off period. If they don't, the contract isn't enforceable.
What the rules say: The Consumer Contracts Regulations (which apply to any goods and services worth more than £42) say you have to be given written notice about your right to cancel the contract within the 14-day cooling-off period (some suppliers give more time). If it doesn't, the contract is not enforceable at any time and you may be able to get compensation.
Did you switch to British Gas in a shopping centre in 2011-2013?
If British Gas sold you a tariff in any Sainsbury's store, or at London's Westfield shopping centre in Shepherd's Bush, between Feb 2011 and Mar 2013, you may have been mis-sold to. Customers of Sainsbury's Energy were also mis-sold to - as British Gas supplies its gas and electricity.
At stores between the dates above, British Gas mis-sold tariffs to more than 4,000 customers. Its staff exaggerated claims about how much customers could save by switching to British Gas.
Staff also gave incorrect tariff comparisons. They compared deals where people paid quarterly, which is pricier, to deals where you pay by monthly direct debit, which is cheaper. Many customers mis-sold to ended up paying more than if they'd stayed with their old supplier.
British Gas has put together a £1m compensation package. Here's how it breaks down:
- £400,000 has been paid to customers it has contacted. This comprises around £350,000 for Sainsbury's Energy customers and £50,000 for British Gas customers.
- British Gas has compensated customers it couldn't contact £170,000 in total. This is made up of about £140,000 for Sainsbury's Energy and £30,000 for British Gas customers.
- As British Gas couldn't reach 1,300 ex-customers it thinks were affected, and because it didn't tell people it's a partner of Sainsbury's Energy, it's paid about £430,000 to the British Gas Trust. The trust gives grants to applicants to help pay utility bills.
Did you switch to E.on via a sales rep in 2010-2013?
Anyone who switched to E.on on the doorstep or via a call centre sales rep between June 2010 and Dec 2013 may be able to get compensation.
You could be due a share of a £20 million payout after the energy giant was found guilty of mis-selling on a massive scale.
The firm failed to train and monitor staff properly. This meant when sales staff phoned or doorstepped customers, between June 2010 and December 2013 they were giving the wrong estimates of possible savings.
Here is how payouts will be made:
- About 333,000 vulnerable customers on its Warm Home Discount energy package will get £35 automatically, as long as they were customers on 30 April 2014. This group won't necessarily have been mis-sold to, but Ofgem wanted cash to go to customers rather than being paid as a fine. This adds up to a £12 million payout.
- E.on has identified 465,000 people it thinks may have been mis-sold a tariff. It's writing to them asking them to get in touch, but it stresses others may also be due money back. This adds up to an £8 million payout in total.
See the E.on mis-selling news story for more details.
Did you switch to Scottish Power via a sales rep in 2009-2012?
E.on's not the only big supplier to be caught out. In October 2013 Ofgem forced Scottish Power to pay £8.5 million to 190,000 customers after investigators found that doorstep and telesales agents mis-sold tariffs.
So anyone who switched to Scottish Power on the doorstep between October 2009 and January 2012 may be able to get compensation.
The supplier has been writing to 336,000 households who it believes may have been mis-sold to. Some of these customers may have since switched supplier. Once you've got a letter, either contact Scottish Power on 0800 074 0362 or fill in its online form.
If you didn't receive a letter and think you may have been mis-sold to, you can ask Scottish Power to review your case by calling it or using the same form. For full info see the Scottish Power mis-selling MSE news story.
Did you switch to Scottish & Southern Energy via a sales rep in 2009-2012?
Anyone who switched to Scottish & Southern Energy (SSE includes Scottish Hydro, Southern Electric, Swalec and Atlantic) on the doorstep between October 2009 and September 2012 may be able to get compensation.
Ofgem fined Scottish and Southern Energy (SSE) £10.5 million in April after finding that between October 2009 and September 2012, it misled some customers into switching to the firm by telling them they would save money. In reality, they were put onto more expensive tariffs (see the full SSE mis-selling news story).
SSE has been writing to everyone it thinks may be due compensation. It says you must prove, from the details you send, that you suffered financial loss. You don't need to have got a letter from SSE, you just need to have switched within those dates and/or switched on the doorstep (you could have switched over the phone or in-store).
If you think you've been affected by SSE mis-selling and haven't had a letter, call 0800 975 3341
Share your successes in the Energy Mis-Selling Discussion
The energy mis-billing checklist
With such over-complicated energy tariffs, it's no surprise massive mistakes which can cost £100s are made. Check the list to see if you may have been mis-billed.
Have you complained about a faulty meter?
If you've already complained to your supplier about a faulty meter and they've done nothing, you should have cause for redress. If you've received a big bill due to this, you may not have to pay all of it, though the supplier's allowed to base bills on an estimate in this case.
What the rules say: The Back Billing Code says the supplier can't bill you for more than 12 months' energy in certain circumstances where it has made a mistake.
Has your supplier mixed up your day and night rates?
Some tariffs, such as Economy 7, mean you get cheaper energy during off-peak night times. But suppliers have been known to mix up rates and charge night-time usage at the pricier day rate.
What the rules say: The Back Billing Code applies here, so you shouldn't be billed for the error for more than 12 months. It states the code applies when people are billed for meter mistakes, eg, night readings recorded as day readings and vice versa, and the supplier had the opportunity to recognise this but did not investigate further.
Have you given correct meter readings but still have a big bill?
If you've either given correct readings that your supplier has ignored, or it's not maintained regular meter readings, you may not have to pay back any arrears beyond 12 months.
What the rules say: Again, the Back Billing Code should apply here. It states when a customer provides correct readings but a supplier rejects them as invalid without investigation, they shouldn't be billed for energy used more than 12 months ago.
This list isn't exhaustive. Please report new scenarios in the Energy Mis-Selling Discussion
How to complain
Here's our step-by-step guide to getting your money back and compensation.
Step 1: You MUST complain to your supplier first
While you don't need substantial proof to get compensation, the more facts you have, the more likely it is your complaint will be resolved. Gather old bills, contracts, times of sales visits and salespeople's names. Even if you noted something down on the back of an envelope, this will strengthen your case.
Take all the info you have and draft a letter of complaint to your supplier. For less serious complaints, call your supplier and explain over the phone, but make sure you note down times, dates and who you spoke to.
Step 2: After eight weeks, go to the free Energy Ombudsman
The Energy Ombudsman Service is a free independent, official body that settles disputes for the energy sector. It has the legal power to adjudicate on individuals' complaints or complaints from small businesses.
You can use it if you've had a problem with your energy provider and you've had no luck with its official complaints process. If after eight weeks your supplier hasn't got back to you or its reply isn't satisfactory, you can take your complaint to the Ombudsman if your supplier participates in the scheme (see the full list).
You can complain over the phone, on its website or via the post. You'll need the following:
The date you first complained.
What you and the firm have done about the problem.
What you want as a resolution to the problem.
If you are asking for an amount of money, what that's based on.
Once you've contacted the ombudsman, if it agrees to take on your case it will send a response within six to eight weeks. If it rules in your favour, it will send a letter to your provider (and you) detailing what the provider needs to do. This could be an apology or even a payment to you (up to £5,000). The provider has 28 days to respond and if it fails to do so, the ombudsman will chase it up to make sure this happens.
Share your successes in the Energy Mis-Selling Discussion.