Energy firm 'treated customers poorly'
nPower hit with £26m penalty for customer failings
Energy company npower has been ordered to pay £26 million in compensation for failures in billing and complaints handling.
The money will be divided between some of the worst affected customers and charity.
Regulator Ofgem has also agreed targets with npower for it to further improve its performance. If npower fails to meet these targets, it will be told to stop proactive domestic sales activity and advertising until all are met.
Many of npower’s problems surfaced after the firm introduced a new IT system in 2011. Between September 2013 and December 2014, npower issued over 500,000 late bills. Some affected customers also received inaccurate bills with little or no detail on how these were calculated.
During this period, npower customers made over 2m complaints with the majority about late or inaccurate bills. npower often failed to resolve these issues promptly, pursued debts which were in dispute and failed to keep its own commitments to customers on billing. This, says Ofgem, caused significant distress and worry for many.
npower also failed to deal with complaints effectively because of failures with its IT system. For several years, npower has recorded a significant number of complaints incorrectly, leading to unresolved complaints being logged as resolved and multiple records created for one issue. This created follow–up problems for customers.
Ofgem says the supplier did not refer all customers to its complaint handling procedures and in some cases, failed to advise them that they could take their complaint to the Energy Ombudsman if unresolved after eight weeks.
Customers do not need to do anything as npower will contact those who have been worst affected.
Dermot Nolan, Ofgem chief executive said: “npower failed its customers. Not only have its billing and complaint handling procedures been chaotic, it treated many of its customers poorly, which is completely unacceptable. npower’s management failed to act quickly enough to protect its customers when things went wrong with changes to its IT system.
“It’s important that all suppliers ensure they follow the principles of treating customers fairly at all times. The payment of £26m sends a strong message to the industry that we expect them to act quickly and effectively to ensure a good customer experience.”