Utility giant npower faces prosecution for misleading consumers into signing up to a price-freeze promotion that actually increased their bills by five per cent.
Last year the company, which is owned by German utility company RWE, ran a campaign urging customers to: “Freeze your energy prices. Act now to avoid price increases.”
However, the price freeze was intended only for npower customers and not for customers of its newly acquired subsidiary Northern Electric & Gas.
Npower failed to point out the fact on its leaflets, following which the Middlesbrough Borough Council’s trading standards department carried out an investigation.
The matter was taken to Teesside Magistrates Court, but the magistrates ruled that their sentencing powers – a maximum of &£5,000 fine – are insufficient and have referred the case to Crown Court for trial at a later date.
This is not the first time that npower has got into serious trouble for its marketing techniques. Energy regulator Ofgem has issued several warnings over mis-selling gas and electricity (MW October 4, 2001).
A spokeswoman for npower says: “We accept we made a mistake by not adding into our printed materials all the information that was explained on the telephone to customers wishing to sign up, but all our marketing was carried out in good faith.
“We have reinforced the checks and balances in our campaign procedures to help ensure this doesn’t happen again.”
Npower acquired Northern Electric & Gas in August 2001.