Implementation of Sales Guarantee for Household Energy Customers

15 Dec 2011

SSE will implement its sales guarantee for household energy customers from next month (January 2012).  Under the guarantee, any customer who shows that they switched their energy supply to SSE after being given inaccurate information or being misled will have any resulting financial loss made good.  The guarantee is one of 10 proposals to build trust in energy supply published by SSE in October 2011.

To ensure fairness between existing and new customers, the guarantee will apply to any household energy sale made by SSE since October 2009, when Ofgem placed new obligations on energy suppliers to make sure sales activities are conducted in a fair and professional manner. 

From late January onwards SSE will initially write to all of its existing customers who it signed up through the doorstep sales channel between October 2009 and July 2011 (around 400,000) to make them aware of the guarantee and to let them know what they need to do if they believe they have suffered any financial loss.  In July 2011, SSE became the first supplier in the Great Britain market to stop commission-based doorstep selling of electricity and gas.  

A sales guarantee information line* has been set up and a helpline will become fully operational in late January, when SSE starts to write to customers.  

While it is not possible to predict precisely how many customers may have suffered a financial loss as a result of switching energy supplier, SSE believes that around £5m should be sufficient to meet any claims under the guarantee arising from energy sales between October 2009 and the end of 2011.  The application of the guarantee will be independently assured so that customers have the maximum possible confidence in the process.  The provider of the independent assurance will be appointed in the New Year.

To complement the sales guarantee, and also as part of its plans to build trust in energy supply, SSE is currently piloting with customers an Annual Energy Review.  The aim of the Review is to ensure that customers are on the right tariff and payment method to suit their needs and to highlight opportunities for other energy improvements such as efficiency.  Every SSE customer will be offered an Annual Energy Review from October 2012.

SSE supplies electricity and gas as Scottish Hydro, Southern Electric, SWALEC and Atlantic, as well as SSE.  In September 2010, Ofgem launched an investigation to establish whether four suppliers (EDF Energy, npower, Scottish Power and SSE) were complying with the obligations it introduced in October 2009.  SSE is co-operating fully with Ofgem’s investigation, which is ongoing.

Alistair Phillips-Davies, Generation and Supply Director of SSE, said:  

“We agree with Ofgem about the need to restore customers’ trust in the energy supply market and to treat customers fairly.  That’s why we have decided to introduce this sales guarantee and to implement it retrospectively.   

“We believe that most of our energy sales have been conducted in a fair and professional manner and that customers of SSE benefit from our commitment to consistently competitive prices over the medium term and sector-leading service.
At the same time, good service starts with the sales process and if customers have actually suffered a loss as a result of that process, we will acknowledge that and make good that loss.

“We have been saying for some time that energy is a significant purchase and the sales process rightly requires increasingly significant customer safeguards.  This guarantee, and the retrospective application of it, is a practical demonstration of putting words into action.”

* The number for the SSE sales guarantee information line is 0845 0707 388. It contains a recorded message with information about the guarantee.  From late January onwards, SSE will operate a helpline on the same number.