Energy Firm's Payments To Charity Investigated

An investigation is being launched into claims an elderly people's charity promoted expensive energy tariffs to pensioners in exchange for a fee.

Energy Secretary Amber Rudd has asked watchdog OFGEM to look into the allegations in The Sun that E.ON paid Age UK £6m for helping it sell its power.

The Sun says that Age UK was paid £41 for every person who signed up to a special E.ON tariff that cost people £245 more than it would if they were on the firm's cheapest deal.

Ms Rudd said she takes the allegation that UK pensioners are being misled "very seriously".

The Sun said it found details of the E.ON payments to Age UK in the charity's annual accounts.

The newspaper said the charity recommended people should sign up to the higher cost tariff in leaflets and books, stating it was "great value" and "helps save energy and money".

There are currently around 152,000 customers on the tariff - equivalent to a £37m overspend - according to The Sun.

Each shelled out £1,049 a year for their fuel.

A spokesman for Age UK denied the charity had been pushing the expensive tariff. He said it disputed The Sun's interpretations of its relationship with E.ON.

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.

"We launched the most competitive, fixed two-year energy tariff available anywhere on the market on 20 January this year, with no exit fees.

"Energy prices change all the time and we have always advised older people to look out for new good deals and we will continue to do so."

Will Hodson, a co-founder of the consumer group The Big Deal, accused E.ON of exploiting Age UK's position as a trusted charity.

He said: "Big Six energy companies like E.ON care about profit not people. Taking advantage of the elderly like this is completely out of order."

In January, Age UK criticised the big six energy firms - of which E.ON is one - for overcharging.

A spokesman for E.ON said: "Our current Age UK tariff was the cheapest product of its type in the UK when it was launched in January. Customers can switch between products at any time without incurring any costs.

"If a customer is on a fixed tariff and they opt for a price alert, and if we issue a new tariff that is cheaper, we will automatically notify them of that.

"But in line with OFGEM's rules, we can't switch people without their consent."

A spokesman for 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."

The claims come just weeks after a report by the Fundraising Standards Board (FRSB) found charity fundraisers made a poppy seller who took her own life feel "distressed and overwhelmed".

Days later the parliamentary Public Administration and Constitutional Affairs Committee warned charities their fundraising activities could be controlled by law unless a new voluntary regulator succeeds in cleaning up the sector.

An OFGEM spokesman said: "OFGEM rules require energy companies to treat consumers fairly when they are marketing and selling energy. OFGEM has a track record of punishing firms who mislead consumers and we will look carefully at these claims."

:: Age UK are not the only charity working with an energy supplier. Scottish Power has links to Cancer Research while First Utility have a tie-in with the NSPCC.