npower faces £10m fine and selling ban over poor service

Energy Supplier to face fine

The energy supplier npower may have to stop acquiring new customers unless it can send bills out on time. They’ve had more complaints than any other supplier so far this year with Which? reporting 83 grievances  per 1,000 customers.

Ofgem, the energy industry regulator, has warned the company that if it does not meet monthly targets on late billing then it will be banned from selling to new customers and fined up to £10m.

The energy supplier has been told it has until the end of August to improve standards and hit their targets, otherwise it will have to end all “proactive telesales” to new customers. Npower released a statement in which they said they were apologising “again”.

Last month Citizens Advice said that their customer service was “unacceptable”. The energy firm has gathered more complaints than any other supplier, every quarter, since the end of 2012.

Broken the rules

Ofgem Question Big SixOfgem is launching an investigation into npower’s customer service failings, if found to have broken the rules of the regulator’s standards of conduct, it could face a fine. They have already paid out a £2m fine in 2011, as well as apologising to customers in December 2013 for failing to deliver.

Ofgem’s senior partner in charge of enforcement, Sarah Harrison said they have been “increasingly concerned about the slow progress to tackle failings.”

Adding: “npower’s recovery plan had not delivered as far and fast as is necessary.”

Clearly, something is going wrong in the npower camp. The smaller, independent brokers must be welcoming this disruption, as it will aid them in grabbing more market share as UK consumers get more and more fed up with the lack luster service from the big six energy suppliers.

Wrongs are trying to be made right however, as npower has hired 650 extra staff members this year to help resolve problems with its computer systems, as well as investing an extra £20m this year to improve customer service.

Npower’s chief executive, Paul Massara, said: “despite the progress we have made, our current billing standards have fallen short of where everyone wants them to be.”

Surprisingly high energy bills

Home Energy ComparisonMany customers have complained that they have received requests for hundreds of pounds that they apparently owe the supplier. This comes from incorrect billing throughout the year, meaning either incorrect meter readings were taken or the supplier had failed to request billing properly previously so customers had missed payments.

Citizens Advice welcomed npower’s new attempt to fix the problems, their chief executive Gillian Guy said: “exposing customers to bill shock is completely unacceptable and can throw household budgets into disarray”

Adding: “For people struggling to make ends meet, finding hundreds of pounds to pay a large bill out of the blue can be impossible.”

Npower claim however that in May 92% of its customers were sent their bills correctly and on time. It could be argued however that is still far too low and it seems many consumers groups are inclined to agree.

The energy supplier is also offering longer periods for repayment to any customer who experienced problems due to getting a late bill, as well as cancelling any bills that were more than 12 months late.

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