The energy regulator has announced it's investigating SSE over the 'cheapest tariff' information it provides to prepayment customers – on the same day the firm agreed to pay almost £10,000 to hundreds of customers who should not have been moved to prepay meters.

Ofgem is to investigate whether SSE failed to provide accurate information about the cheapest tariffs that its customers could switch to and the savings that could be made for doing so.

At the same time, the regulator also announced it had completed a separate investigation into SSE switching some of its customers to prepayment meters. It found the big six firm did not go through proper procedures in some cases. The supplier has offered to compensate 337 customers that were worse off as a result.

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What is 'cheapest tariff' messaging?

Under current rules, suppliers are required to give information on tariffs in customers' annual statements, including the tariff customers are on, details of their annual spend and 'cheapest tariff messaging' – which covers how much they can save by switching to the supplier's cheapest tariff, if they're not already on it.

Suppliers are required to take all reasonable steps to provide information that is complete, accurate and not misleading.

Ofgem confirmed an investigation has been launched into SSE's 'cheapest tariff messaging' following a complaint from a customer, but declined to say any more about the investigation.

SSE to pay 300+ customers £29 each

The regulator has also closed an investigation around SSE's practices in switching customers to prepayment meters, relating to about 1,800 of its customers who had prepayment meters installed between 2014 and 2015.

The investigation found:

  • SSE's advisers did not routinely offer customers who were struggling to pay their bills the option to have energy charges deducted directly from their benefits through the 'Fuel Direct' scheme.
  • Its advisers did not consistently assess in full these customers' ability to pay when agreeing debt repayment plans.
  • It did not give clear and comprehensive written details of disadvantages of prepayment meters (eg, no direct debit discounts).
  • It wrote to customers before installing prepayment meters promising access to SSE's "cheapest" tariff, yet 337 started paying more.

As a result of the investigation, SSE has agreed to compensate the 337 who paid more as a result of having a prepayment meter installed. These customers will each get £20 in compensation and a £9 refund.

SSE says the refund and compensation will be paid in the next few weeks. If you were affected, SSE will add the payment automatically to your prepayment as credit. It will also contact you to let you know you'll be compensated.

It has agreed to retrain staff on assessing a customer's ability to pay, and to monitor calls between advisers and customers who have difficulty paying. It will also offer customers who have switched to a prepayment meter the option to have a credit meter installed for free, if appropriate.

'SSE will co-operate fully'

In response to Ofgem's announcement regarding the new investigation, a spokesperson for SSE said: "SSE will co-operate fully with Ofgem over the course of this investigation, which relates to a historic system issue that SSE identified, resolved and reported voluntarily to Ofgem."