Age UK has vowed to address concerns around a lack of transparency after the Charity Commission branded its partnership with energy supplier E.on a "conflict of interest".
The Charity Commission's criticism follows media reports in February that Age UK "received £6 million a year from energy supplier E.on to promote" a fixed two-year energy tariff that "was more expensive than other tariffs available".
Age UK temporarily stopped offering the tariff after the claims.
A Charity Commission report published on Tuesday (19 April) found that customers weren't informed of the commercial relationship between the two organisations. It describes Age UK's "endorsement" of E.on's 'Age UK Fixed 2 Year v5 Online' tariff, which was launched in February 2015. The 'Age UK Fixed 2 Year v6 Online' tariff' was launched in January this year.
Research by MoneySavingExpert.com earlier this year found the 2015 two-year fixed E.on tariff was considerably more expensive than other two-year fixes on the market see our full analysis.
Ofgem had initially agreed to look into the matter but will not launch an official investigation as it says it is satisfied that no claims were made about tariffs being the cheapest products on the market.
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What did the Charity Commission find?
The main concerns outlined in the report were:
- That the charity was not clear and transparent when communicating its links to or endorsements of specific products.
- That the charity was not clear in communicating the meaning of "best value", and that because of the charity's endorsement of the products it was reasonable for customers to assume they would be the cheapest.
A Charity Commission spokesperson told us: "We will continue to engage with the charity to address any issues around partnership agreements including a process review, as it is important that charities outline fees paid to them, which wasn't made clear [in this case].
"We also didn't think the charity had considered the conflict of interest in promoting a product where the customers the product was being sold to were also beneficiaries of the charity."
What happens next?
The Charity Commission will be working with Age UK to help address the issues raised and Age UK has agreed to commission a review examining how it should ensure trading activities do not undermine the charity's main purpose of helping the elderly.
Having temporarily stopped the tariff in February, Age UK is yet to confirm whether it will be relaunching the product, but it has not ruled out endorsing other energy tariffs from E.on, or different suppliers, in future.
An Age UK spokesperson told us it will "follow the commission's advice in this report and any further advice the commission has to give us".
They add: "The commission is suggesting that we should take special care if we were to consider going back into energy and we would certainly do so.
"We accept we can never be too transparent and our trading arm needs a sharper demarcation from the Age UK charity."
Meanwhile, an E.on spokesperson says: "We continue to put our customers first; ensuring they have the information and tools they need to choose a tariff which best suits their needs".