MSE News

Green Star Energy compensates 8,815 customers after mis-selling

Gas and electricity supplier Green Star Energy has paid almost £680,000 to more than 8,800 customers and Ofgem's fund for vulnerable consumers following a number of failings.

Green Star Energy has paid £361,415 to 8,815 customers who switched to it through price comparison site Utility Discount, after the regulator found Utility Discount acted as a sales channel for Green Star Energy.

As well as paying compensation, Green Star Energy also agreed to pay £151,376 to Ofgem's consumer redress fund – which helps vulnerable customers – and waive exit fees for affected customers.

As part of a separate issue, it also agreed to pay a further £166,492 to the fund after it failed to send annual statements to customers between August 2014 and November 2017 – which it must do under Ofgem rules.

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How were customers mis-sold?

Between 25 January and 25 May this year, customers who went to the Utility Discount site via a particular advert were shown only Green Star Energy tariffs – even if they could have saved more by switching to another supplier's tariff.

Only those customers whose current tariff was cheaper than any Green Star Energy tariff were shown deals from other companies.

Ofgem has ruled that as a result of this, some customers did not realise cheaper deals were available.

Under Ofgem rules, it must be clear to consumers when a third party website is acting on behalf of a supplier rather than offering an independent service, thus Green Star Energy did not comply with its supply licence.

What does Green Star Energy say?

A spokesperson for Green Star Energy said: "Our aim is to provide attractive products to energy consumers and world class customer service. As such, we have worked proactively and cooperatively with Ofgem to remedy this matter and have further made a contribution to the Energy Savings Trust that will benefit consumers."

MoneySavingExpert.com has contacted Utility Discount for comment and will update this story if we hear back.