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Npower Fined £26m By Ofgem for “Failing to Treat Customers Fairly”

Written by: Keith Tully

Reviewed: Friday 18th December, 2015

The energy giant Npower has been fined £26 million by Ofgem for a variety of offenses that the energy sector watchdog has said amounts to a failure of the company to treat its customers fairly.

According to Ofgem, Npower sent out inaccurate bills on a very considerable scale throughout the country and then failed to handle the resulting complaints in an appropriate or acceptable fashion.

As many as half a million British consumers are believed to have been affected by Npower’s failings, which saw thousands of inaccurate monthly energy bills being sent out by the company.

The problems are said to have arisen after the company introduced a new IT system in 2011, with the issues focussed on by Ofgem relating to events that took place and Npower’s responses between September 2013 and December 2014.

Some 2 million complaints were lodged with Npower about late and inaccurate bills in that period, with Npower continuing to pursue debts in dispute and failing to “keep its own commitments to customers on billing", according to Ofgem.

Matters were apparently compounded by further problems with Npower’s computer systems which incorrectly recorded many customer complaints as being resolved and numerous complaints as a single complaint.

The result of which was “significant distress and worry for many”, Ofgem has said in explaining the reasons behind its decision to issue Npower with what is a record fine for the UK’s energy sector.

“Npower failed its customers,” said Dermot Nolan, Ofgem’s chief executive. “Not only have its billing and complaint handling procedures been chaotic, it treated many of its customers poorly, which is completely unacceptable. 

“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.”

Previous multi-million pound fines issued by Ofgem to energy suppliers in the UK in recent years have included a fine of £12 million issued to E.On for breaking energy sale rules and a £10.5 million fine for mis-selling issued to SSE in May 2013.

Keith Tully

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Keith has been involved in Business Rescue since 1992, during which time he’s worked for both independent and national firms. His specialties include company restructuring matters and negotiating with HMRC on his clients behalf.

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