npower fined £26m over billing issues
The energy giant has also been told it will have to stop proactive domestic sales activity and advertising if it fails to meet billing and complaints handling targets, while the £26m is to be split between charity the worst affected customers and charity.
Ofgem has cited the installation of a new IT system at npower offices in 2011 as a main contributor to the issues, stating that over 500,000 late bills were issued between September 2013 and December 2014, with some customers also receiving inaccurate bills with little or no detail on how the firm calculated them.
npower received two million complaints during the same period, while the company continued to pursue debts which were in dispute, according to watchdog Ofgem, with the firm recording a significant number of complaints incorrectly, leading to unresolved complaints being logged as resolved and multiple records created for one issue.
Dermot Nolan, chief executive of Ofgem, believes npower has 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.”
npower’s new targets include reducing the number of late invoices over six months old, reducing the number of complaints over 56 days old, reducing inflow of new Ombudsman cases and identifying and repaying all potential customers who may have been back-billed incorrectly from July 2010 onwards.
Simon Stacey, managing director of domestic markets for Npower, said: "The last few years, since we changed the systems that support our domestic business, have been very disappointing for our customers and for Npower.
"We are very sorry about what has happened and that is why we have agreed this significant package of customer redress."
npower’s latest fine comes after the firm were made to pay £2m in 2011 for similar issues, while another of the ‘Big Six’ energy companies, E.On, was made to pay £7m by Ofgem last month for failing to install smart, energy efficient meters for business customers.
