Financial News

  • 22 April 2014, 15:09

British Gas Bonus Claims To Be Investigated

Claims that British Gas workers have been paid large bonuses to inflate customer bills are to be investigated by the energy regulator, Ofgem.

It comes after a former employee claimed the energy company encouraged its sales staff to sign up charities, churches and small businesses to its highest-priced tariffs in order to boost their own earnings.

British Gas has strongly denied the allegations.

The whistleblower, who worked for the company between 2010 and 2013, told the Daily Mail the firm's policies were designed "to rip off" customers.

He claimed sales agent typically earned between £4 and £37 in commission per deal if they persuaded existing customers to renew contracts.

But by moving a customer to a more expensive deal they could earn more than £400 a time, he alleged.

"People were desperate to make the salaries they had been promised, so everyone inflated the prices," he told the paper.

"Scout clubs was a favourite one; churches, charities, small businesses, where people would just go for the maximum 5p notch-up," he added.

A British Gas spokeswoman said: "British Gas strongly refutes any suggestion that employees are paid commission on any prices charged to residential customers."

British Gas Business managing director Stephen Beynon said his sales agents are paid commission, but he denied any suggestion that contracts were negotiated inappropriately.

"This is a highly regulated market, and every part of the sales negotiation process is closely monitored," he said.

"Sales agents in British Gas Business do receive commission, but we are reducing its importance.

"We're leading the way in addressing the variability in price that customers face in this market, and we'll continue to do so."

Ofgem said in a statement: "There are strict rules in place which require suppliers to take all reasonable steps to ensure information provided is accurate and not misleading, and that sales activities are conducted in a fair, honest, transparent and professional manner.

"Ofgem is an evidenced-based regulator and we would encourage anyone with information that an energy company is not complying with Ofgem rules to provide us with this."

Energy and Climate Change Secretary Ed Davey said: "This is a very serious and deeply disturbing allegation that comes as we are doing all we can to make the energy markets work better for all consumers - whether domestic or businesses.

"The Government fully supports Ofgem's recommendation for a full market investigation.

"In the meantime, we'll continue to help people pay less for the energy they use, driving the competition that has seen the number of energy suppliers triple since 2010 and people switching supplier in record numbers."

The allegations come days after Ofgem fined British Gas Business for a series of failures including blocking firms from switching to other suppliers.

Ofgem said British Gas Business would pay a total penalty of £5.6m of which £800,000 would be in fines, on top of £1.3m already paid to 1,200 customers who paid higher bills because they were not notified when their contracts were due to expire.

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