npower has been fined £26 million by Ofgem, following the supplier’s failures over billing and complaint handling. 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 it introduced a new IT system in 2011. Between September 2013 and December 2014, npower issued more 500,000 late bills. Some affected customers also received inaccurate bills with little or no detail on how they had been calculated.
During this period, customers made more than 2 million complaints, mostly about late or inaccurate bills. npower often failed to resolve these issues promptly, pursued debts that were in dispute and failed to keep its own commitments to customers on billing, causing 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.
The supplier did not refer all customers to its complaint-handling procedures and, in some cases, did not tell them that they could take their complaint to the Energy Ombudsman.
Ofgem chief executive Dermot Nolan says: “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 £26 million sends a strong message to the industry that we expect them to act quickly and effectively to ensure a good customer experience.”