Scottish Power to pay £1.5m after charging customers too much

Scottish Power is to pay £1.5m in refunds and compensation after it charged customers above the price cap at the height of the energy crisis.

The company charged 1,699 direct debit customers a higher rate between 2015 and 2023 – across 11 price cap periods – which should only have applied to those who pay by standard credit. This refers to when a bill is received first before payment is made.

Ofgem said Scottish Power is paying £250,000 in direct refunds to affected customers and another £250,000 in goodwill payments – an average of £294 per customer.

All payments will be made automatically and the affected customers do not need to do anything.

The firm has also agreed to pay

The average amount Scottish Power overcharged during the period in question was £149 per customer. £1m to Ofgem’s Energy Industry Voluntary Redress Fund, which benefits charities and community projects that help vulnerable customers with energy-related support.

Ofgem said Scottish Power reported itself to the regulator last summer when it discovered that operational errors had led to the mistake.

Dan Norton, Ofgem’s deputy director for price protection, said: “The last few years have been challenging enough for energy customers facing increasing cost of living pressures, without the additional hardship of being overcharged.”

Scottish Power said it has put additional controls and monitoring in place to reduce the risk of anything similar happening in future.

Andrew Ward, chief executive of Scottish Power’s customer business, said: “We’re so sorry that a very small number of our customers were affected by this mistake and faced an increased financial burden – especially during a time when energy prices were reaching an unprecedented high.”