SSE Fined £10.5 Million for Mis-Selling
LONDON -- The shares of SSE slipped 2 pence to 1,505 pence during early London trade this morning after the FTSE 100 member was fined £10.5 million by Ofgem.
SSE, which supplies electricity and gas to more than 9.5 million household and business customers within the U.K. and Ireland, was found by the regulator to have "consistently failed, over a prolonged period of time, to conduct its sales activities in a way that would provide clear and accurate information on prices and potential savings".
Sarah Harrison, a senior partner in charge of enforcement at Ofgem, said: "In order to restore trust in the energy market suppliers must comply with their obligations and play it straight with consumers. Ofgem's findings show SSE failed its customers, mis-sold to them and undermined trust in the energy supply industry."
SSE said it was "deeply regretful that breaches occurred and apologises unreservedly to any customers who have been affected by sales activity which ran counter to the values and culture of the company."
A large proportion of the mis-selling occurred between October 2009 and July 2011 and involved doorstep selling. Ofgem claimed SSE's board paid "insufficient attention to compliance" and failed to adequately monitor and audit doorstep, in-store and over-the-phone sales activity.
The £10.5 million fine, plus a £5 million compensation fund SSE has established, compares to group profits of £1.3 billion recorded during the twelve months to March 2012.
During January, SSE said its profits would advance by about 4% while its shareholder dividend would be raised from 80.1 pence to around 84 pence per share.
Such a lift would place the shares on a dividend yield of 5.6%.
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