Npower could face £10million fine for appalling service

After MoneyMail tells watchdog of billing fiasco...

EnERgY giant npower faces a multi-million-pound fine and a ban on telesales activity over a bills shambles that has hit 280,000 customers.

industry regulator Ofgem has given it an ultimatum to improve customer service and deliver accurate bills by august or face a fine that could top £10million.

The ruling is a victory for the Daily Mail’s MoneyMail section, which triggered the investigation last year by submitting a dossier highlighting the shambles to the watchdog. it contained dozens of letters and emails from people who suffered poor service, wildly inaccurate bills and frustrating delays in getting refunds. npower r eceived al most 1.4million complaints in 2013 – and the number in the first three months of 2014 was up 70 per cent on a year ago.

Hundreds of thousands of customers were not sent bills for months, sometimes more than a year, despite making repeated requests to know how much they owed. The result was that they then faced huge bills – of more than £1,000 in some cases – followed by demands to pay up or face some kind of enforcement action.

There were also serious problems with incorrect direct debit payments. Some customers are owed hundreds of pounds by npower as result of over-payments, but have had difficulties getting their money back.

npower admitted in September that a computer glitch caused by a transfer to a new billing system had caused problems with 700,000 customer accounts. in December, it apologised and agreed to make a payment of £1million to vulnerable customers by way of redress.

However the company still has a huge backlog of more than 400,000 bills to sort out and has been given an ultimatum by Ofgem to reduce that figure to 100,000 by the end of august or face a telesales ban.

The watchdog also announced an investigation into poor customer service associated with the way it handled complaints that could lead to a huge fine. Sarah Harrison, Ofgem’s senior partner in charge of enforcement, said npower customers had suffered ‘service failures’ for too long. ‘We have been increasingly concerned about the slow progress to tackle failings,’ she said. ‘npower’s recovery plan has not delivered as far and fast as is necessary. Our analysis of complaints data also raises some serious concerns which will be thoroughly examined in our investigation.’

Thousands of people have contacted Citizens’ advice for help in dealing with npower. its chief executive, gillian guy, said: ‘Exposing customers to bill shock is completely unacceptable. Providing accurate bills and dealing with problems quickly are the basics of decent customer service. npower is a long way from providing that.’ Energy Secretary Ed Davey joined the attack, describing npower’s customer service as ‘unacceptable’. npower is a subsidiary of the giant german utility firm RWE, which has a history of failing British consumers. When it owned Thames Water it was fined £9.7million for failures in 2005 and 2006.

it has also been criticised over its tax affairs. The firm made £750million profit in the three years 2009 to 2011 but paid no Corporation Tax.

npower’s UK chief executive, Paul Massara, wrote to all 3.4million customers in December apologising but the company was forced to issue a second apology yesterday. it said it has assigned an extra 650 staff to help resolve customer service problems and it is spending £20million to improve its systems.

Mr Massara said npower was ‘committed to getting things right for our customers’ and promised that none would be left out of pocket.