Member Article

npower hit with £26m fine for ‘failing to treat customers fairly’

Following billing issues that affected more than half a million customers between September 2013 and December 2014, npower has received a £26m fine from Ofgem for ‘failing to treat customers fairly’.

The industry regulator said that the gas and electricity supplier ‘failed to handle complaints effectively within a reasonable timeframe’.

After intervention from government body, npower’s performance has improved, but it ‘must continue to demonstrate improvements to its customers’, said Ofgem in a statement released today.

npower is required to pay £26m as a consumer redress package, following the supplier’s billing and complaint handling failings. The money will be divided between some of the worst affected customers and charity.

Ofgem has also agreed targets with npower for it to further improve its billing and complaints handling. If npower fails to meet these targets, it will stop proactive domestic sales activity and advertising until all are met.

Many of npower’s problems surfaced after the company 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.

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.”

This was posted in Bdaily's Members' News section by Ellen Forster .