The regulator found that the energy supplier mis-sold energy deals via door-to-door salespeople and over the phone.
Scottish Power has accepted these failings and has agreed with Ofgem than it will pay £7.5 million to benefit vulnerable customers as part of the Warm Home Discount scheme, while another £1 million will be set aside for a customer compensation fund.
Scottish Power stopped doorstep selling in 2011 and has put in place independent checks on the conduct of its telephone agents in new sales. Ofgem said if this had not been the case the company would have faced a higher penalty charge.
Sarah Harrison, Ofgem’s senior partner in charge of enforcement, said: “Today’s announcement is a clear signal to energy suppliers of the consequences of breaching licence obligations and of the importance of taking action to put things right for consumers when they go wrong.”
Neil Clitheroe, Scottish Power’s chief executive of energy retail and generation, said: “I am happy that this matter has now been concluded. We accept Ofgem’s findings and we apologise unreservedly to those customers affected.
“This arose as a result of new regulations which were introduced in 2009. I am sorry to say that we didn’t implement these properly at that time.
“However, I am pleased that Ofgem has made it clear that they found no evidence of a strategy by Scottish Power to deliberately mis-sell to customers.”
Scottish Power will be writing to 336,000 customers who may have been affected by the mis-selling between October 2009 and January 2012.
Customers can either complete a compensation form online, or call 0845 030 3041 or 0845 030 3048, which according to Ofcom can cost between 1p and 11p per minute from landlines and up to 41p per miute from mobiles.
Executive director at Which?, Richard Lloyd, encouraged consumers to complain using the online form, tweeting: “Scottish Power asking customers who think they have been mis-sold to call a costly 0845 number”.
This enforcement action follows Ofgem’s record £10.5 million fine for SSE in April this year, also for mis-selling.
The energy regulator still has two ongoing mis-selling investigations into Npower, which was launched in 2010, and into Eon, which was launched last year.