SSE failures lead to £1m Energy Trust payment

POWER: Perth utility made self-referral to Ofgem over inaccurate meter statements

SSE has avoided formal enforcement action but will make a £1 million “redress” payment after issuing inaccurate statements to 580,000 prepayment meter (PPM) customers.

The utility will pay the sum to the Energy Savings Trust – a body that provides support to consumers facing fuel poverty issues – after the Perth power group reported itself to the regulator, Ofgem, over the issue last year.

A probe by the watchdog established that between June 2014 and September 2015, SSE sent out 1.15 million statements to PPM consumers containing inaccurate and misleading information.

An IT coding error meant the statements had been distributed with incorrect information on the alternative cheaper tariff available to customers and contained inaccurate estimates of how much they could save by switching.

Some statements also overestimated the annual savings customers could make by switching to a standard credit meter and paying by direct debit, as well as by moving to paperless billing.

“The investigation found that SSE failed to act promptly to put things right, by not identifying the issue at an early stage and by not escalating action to address it or putting in place appropriate remedial actions,” Ofgem said.

“The supplier failed to put in place arrangements and processes around customer communications that were complete, thorough and fit for purpose.

“SSE has since improved its processes to prevent this from happening again. This includes carrying out extra checks on their customer communications before issuing them and giving more resources to the teams involved.

“Ofgem has now closed this case without taking formal enforcement action, taking into account the steps that SSE has since taken to address its failings and, considering the low level of harm identified, the redress it has agreed to pay.”

SSE – which last week announced it was raising its standard gas and electricity prices for domestic UK households – is in the throes of a megamerger of its retail division with npower.

The multi-billion-pound move would see the so-called UK Big Six energy suppliers become the Big Five.

The deal is the subject of an in-depth Competition and Markets Authority probe, which is due to report by October.

If the deal is approved, a standalone company will be created with its own FTSE listing.

SSE has improved its processes since the PPM issue came to light and has avoided formal enforcement action by Ofgem.