19 Apr 2014

British Gas denies staff ‘paid extra for inflating bills’

The energy secretary says claims that British Gas paid its staff bonuses if they inflated customers’ bills are “deeply disturbing”. But the energy company denies the allegations.

A former employee said that staff were told they could triple their salaries through commission, if they sold inflated price plans to customers.

This led to some customers paying bills 60 per cent higher than necessary, the whistleblower told the Daily Mail, while staff could increase their £25,000 salary by up to three times the annual sum.

He claimed staff at the energy giant would put churches and charities on the highest-priced tariffs in order to boost their own earnings. British Gas denies all the allegations.

“People were desperate to make the salaries they had been promised, so everyone inflated the prices,” he told the paper. “Scouts was a favourite one; churches, charities, small businesses, where people would just go for the maximum 5p notch-up.”

The whistleblower worked for British Gas between 2010 and 2013, and said that policies had been engineered to make the most money out of customers.

Energy regulator Ofgem urged anyone with information about British Gas inflating prices to come forward, and said it would take “firm action” to protect customers.

Earlier this month British Gas was ordered to pay £5.6m in compensation and fines for blocking businesses from switching suppliers and failing to tell others their contracts were ending, by Ofgem.

‘A very serious and deeply disturbing allegation’

Energy and Climate Change Secretary Ed Davey said on Saturday: “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.”

A British Gas spokeswoman denied the claims. She said: “British Gas strongly refutes any suggestion that employees are paid commission on any prices charged to residential customers. We also reject any suggestion that business contracts have been negotiated inappropriately in our business division, British Gas Business.”

People were desperate to make the salaries they had been promised, so everyone inflated the prices Whistleblower

She added that contracts are always finalised and agreed with the customer, and the process of negotiation is closely monitored.

British Gas announced last October that it was increasing prices for domestic customers at an average of 9.2 per cent for duel-fuel customers – or £123 for the average customer.

In March this year, the industry watchdog, Ofgem, referred the entire energy company for investigation by the the Competition and Markets Authority (CMA), after it found evidence to suggest millions of households may be paying too much for their gas and electricity.

The move followed increasing pressure on energy suppliers from consumer groups and politicians to lower prices, and claims that the structure of the market itself is “broken”.

‘Ofgem takes firm action to protect consumers’

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

“Where companies fail these standards Ofgem takes firm action to protect consumers; since 2010 we have imposed £30m in fines and redress specifically for misselling activities.”

British Gas insisted there was no basis to the whistleblower’s claims: “We take very seriously any concerns raised by employees or customers, and our processes, as well as sales agents’ terms, are regularly reviewed to ensure they are fair and appropriate.”