Households should claim their share of a £5 million refund pot for energy mis-selling after Ofgem handed Scottish and Southern Energy (SSE) a record fine for misleading customers.

The energy watchdog fined SSE £10.5 million after finding that between October 2009 and September 2012, the firm misled some customers into switching to the firm by telling them they would save money. In reality, they were put onto more expensive tariffs.

News of the mis-selling first emerged in 2011, at which point the refund floodgates were opened. While SSE was supposed to contact all mis-selling victims, it's vital you get a claim in if you've not been contacted but were mis-sold to (full details on how to claim in the SSE to issue compensation MSE News story).

Now on top of having to pay cash out, SSE has been fined. The £10.5m will go to the Treasury for public services.

Ofgem found "failings at all levels of SSE's sales processes", beginning with salespeople's opening lines through to the confirmation process which follows a sale (see our Energy Mis-selling guide for what to do if you've been mis-sold to).

In particular, SSE consistently failed to provide clear and accurate information on prices and potential savings when making sales. While SSE stopped doorstep sales in July 2011, failures in telephone and in-store sales continued.

Can I get my money back?

Archna Luthra, energy analyst, says: "These were appalling tactics on SSE's part and the regulator has rightly doled out a hefty fine.

"If you believe you're out of pocket due to its sharp sales practices, I'd urge you to get in touch to claim a refund. This affects some M&S Energy customers too.

"And don't fall for any suppliers' sales tricks. The best way to check if a deal is worth it for you is to do a full market comparison, which looks at all providers and factors in your usage and postcode."

SSE has promised to fully refund customers who can show they switched to SSE after being given inaccurate information or being misled (see the SSE to issue compensation MSE News story for how this will be done).

SSE says it will "make good any financial loss", which means it will pay back the difference between what you paid on your old tariff, compared to what you paid on the SSE tariff you switched to.

Affected customers will typically be reimbursed £65.

If you think you've been affected by SSE mis-selling and haven't received a letter, call 0800 975 3341.

What did SSE do?

SSE sales staff wrongly:

  • Told customers they would save money, when they were actually put on more expensive tariffs.
  • Exaggerated savings customers could make by switching to SSE.
  • Told customers other suppliers were putting their prices up, or that other suppliers' price increases were higher than they actually were.
  • Suggested customers could go on a tariff with no standing charge, without saying this would involve them paying more for the first units of energy they used.

Ofgem's senior partner in charge of enforcement, Sarah Harrison, says: "Today's fine sends a clear message to suppliers that Ofgem will hold to account those companies which fail to treat consumers fairly.

"It is time for the energy industry to take note and get behind Ofgem's reforms to rebuild trust and make the market simpler, clearer and fairer for consumers."

'We let customers down'

SSE's managing director of retail, William Morris, says: "During the period in question we worked hard to offer competitive prices and carve out an industry-leading position on customer service.

"We did not, however, spend enough time monitoring our sales processes. That meant we did not always sell in the right way, and we let some customers down."

Ofgem is still investigating sales processes used by Scottish Power and Npower.

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