E.ON and Age UK have “moral obligation” to recompense older people who appear to have paid too much for deal, Suffolk MP says
17:52 04 February 2016
Energy giant E.ON and pensioner charity Age UK have a “moral obligation” to recompense energy users who appear to have paid hundreds of pounds too much last year, a Suffolk MP has said.
Dan Poulter, a member of the energy select committee, made the intervention ahead of a Charity Commission announcement that it was looking at “any action that might be necessary” following claims that Age UK has been promoting expensive energy tariffs to the elderly in exchange for cash.
The Sun newspaper claims E.ON has paid out £6 million a year to Age UK in return for the charity pushing expensive tariffs to the elderly.
E.ON has confirmed there was a “commercial relationship” between it and the charity but the supplier said its tariffs were competitively priced and Age UK has rejected any allegations of wrongdoing.
E.ON said its current Age UK tariff was the cheapest product of its type in the UK when it was launched in January and customers could switch between products at any time without incurring any costs.
An Age UK spokesman also rejected allegations that the charity has been pushing expensive tariffs and also the “interpretation of the figures”.
The spokesman said: “Age UK has worked with E.ON for the past 14 years, openly and above board, and they have been generous supporters of our charity over and above the number of customers on the tariff.
Age UK Suffolk said it did not have figures for those that had taken up the tariff.
“If people approach us and are interested, we direct them to Eon who then talk them through their options. If an enquirer then takes out this particular tariff then we receive a commission on that, but we don’t have client figures I’m afraid.”
The Sun said it found details of E.ON payments to the charity contained within Age UK’s annual accounts.
It is claimed the charity had been recommending a special E.ON tariff in leaflets and booklets, stating it was “great value” and “helps save energy and money”.
Age UK has been paid at least £6 million every year, receiving around £41 for every person that signed up, it was reported. It is claimed that the tariff, on average, costs pensioners £245 more than they would pay on E.ON’s cheapest deal.
Dr Poulter said legitimate concerns had been raised.
“It is a sad state of affairs because what we have seen is one of the Big Six energy companies has been quietly paying one of Britain’s biggest and trusted charities Age UK to sign their members up to an expensive and costly energy deal.”
Questioned about whether customers should be paid back, he said: ““Absolutely. You have got to trust a charity that is purporting to support and have the best deal for vulnerable older people and that is something I believe E,ON has exploited here and perhaps the charity isn’t that commercially savvy and it hasn’t got the best deal for its customers and I think there is a moral obligation for the charity and E,ON to recompense some of the most vulnerable users, often on fixed incomes and in poor income households.”
The Charity Commission said: “The Commission is aware of concerns raised in the media regarding Age UK’s partnership activities with E.ON.
“The Commission is in contact with both Age UK and Ofgem to determine what regulatory role the Commission might have and any action that might be necessary.”