Although Wednesday's announcement of a record £10.5m should come as no surprise to anyone involved in the compliance industry, it should serve as an continuing reminder of the risk of non-compliance. All areas within SSE's sales approach had major compliance issues, from phone to doorstep sales. According to Ofgem, the mis-selling of the company's products originates from their internal procedures proving to be inadequate, in terms of the inability to fully track and audit their sales processes. Of course, when fundamental failings of this nature occur, all aspects of a business are affected.
The total cost of non-compliance
Over and above the £10.5m fine there is an additional £5m set aside by SSE to compensate customers affected by their bad practice. Of course, there will be far more repercussions of their lack of compliance, with the brand reputation of the company being damaged significantly in the process.
With investigations into Scottish Power and npower on-going and a further investigation launched into E.On's operations last April, it's quite apparent that the energy sector needs to revise their internal GRC procedures fully to avoid further Ofgem penalties.
From our work with national and international energy and utility companies, we understand that transparency and accessibility to relevant policy information, plus having the infrastructure to support change, are paramount to create a culture of compliance. Using the cloud, Xactium supports regulated businesses with a full audit trail of their risk and compliance activities, including a flexible policy solution to ensure all staff are aware of their responsibilities to meet both regulatory standards and company objectives.