London Electricity and its affiliate company Virgin Home Energy face a £2 million fine for mis-selling energy supplies.

Forum Response: Ofgem

Callum McCarthy, chief executive of Ofgem, told ePolitix.com: "The record of London and Virgin Energy in the mis-selling of gas and electricity since the beginning of the year has been completely unacceptable. They are in clear breach of the rules governing direct selling.

"Mis-selling causes great confusion and distress for individuals, often those who are most vulnerable. It also damages customers' confidence in switching suppliers which means that they may not be benefiting from consumer choice as they should. We have, therefore, decided to use our new powers by proposing this substantial penalty.

"This sends out a strong signal to any other companies performing badly in this area. The senior management of London and Virgin should have taken notice of the clear message from customer complaints. Energy suppliers must ensure that their houses are in order or face similar consequences."

Forum Response: London Electricity

Vincent de Rivaz, chief executive of LE Group, told ePolitix.com: "I have always said that mis-selling and inappropriate sales practices are totally unacceptable and they will not be tolerated. I reiterate that again today and I have been personally involved in stamping out these problems. Our commitment now is to move forward building upon the tough and widespread action we have taken which is already beginning to bring benefits. A new organisation with a new management team has been put in place recently which I believe will be a sound basis on which to develop long term quality relationships with our customers as well as meet our wider social and corporate responsibilities.

"Inappropriate sales practices are an industry-wide problem. Although perpetrated by a minority of sub-contracted sales agents they have given the energy industry and competition a bad name. LE Group has now put its house in order. With these experiences behind us we will be seeking opportunities to work with fellow energy suppliers, Ofgem and consumer groups, such as Energywatch, to build new standards for the future."