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Ofgem Pledges Energy Market ‘Radical Overhaul’

As consumers continue to be hit by rising energy bills, energy watchdog Ofgem has promised a “radical overhaul” of the gas and electricity market.

The announcement was made just as Ofgem confirmed their investigation into what it called a “potentially misleading marketing” offer by Scottish Power, when the company recently announced its latest 19% and 10% price hike in gas and electricity prices.

With its Direct October 2012 deal, Scottish Power claimed that customers who switched to its tariff would save £459, and they guaranteed their gas and electricity prices would remain a minimum of 1% below its standard monthly direct debit rate until September 30, 2012. However Ofgem has insisted that the small print did not match up to the promise.

Responding to the inquiry launch, Scottish Power said they believe “all figures that have been quoted by us are accurate” but would cooperate fully with Ofgem’s investigation.

“We agree that information about all energy tariffs across the market should be as clear as possible and we will fully co-operate with the Ofgem investigation,” the utility company said.

The energy regulator has told the so-called Big Six energy providers (Scottish and Southern Energy, Centrica , Scottish Power, nPower, EDF Energy and E.ON UK) that sweeping market reforms are needed to encourage competition and help keep prices down.

Scottish Power is already being investigated over a “significant” difference between standard and direct debit tariffs and, along with EDF Energy, Npower and Southern Energy, alleged mis-selling.

Alistair Buchanan, Ofgem’s chief executive said consumers must feel confident that energy companies are “playing straight” with them

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