Customer billing scandal sees energy f irm face ban
Ofgem warns ScottishPower it could be given sales suspension
SCOTTISHPOwer faces a ban on attempting to recruit new customers over a billing scandal that has left thousands in the dark about what they owe.
The installation of a new computerised billing system – on which the company spent £200million – has proved to be a fiasco.
Now the industry regulator Ofgem has threatened to stop any sales activity to attract new customers if it continues to let down the people and businesses it already supplies.
The move follows recent revelations in Money Mail detailing how the company was failing customers and that Ofgem was effectively letting them get away with it.
For more than a year the ScottishPower billing system – owned by Iberdrola of Spain – was in chaos.
However, only now is the industry regulator taking action. Ofgem said it is aware that 75,000 families are waiting for long overdue bills. This puts them at risk of suddenly being hit with a demand for a very large sum, so-called ‘bill shock’.
There is also evidence customers trying to reach the company with a query are facing very long queues because its call centre has been overwhelmed by complaints.
Ofgem has also l aunched an investigation into the way Scottish Power treats customers amid evidence that it is failing to respond to valid complaints and correct the problems it has caused.
Citizens Advice Chief executive Gillian Guy said the firm was guilty of ‘woeful customer service’.
She said: ‘Getting bills right is a basic part of supplying energy, yet people are coming to us with a myriad of problems i ncluding bogus bills and being charged despite switching. we helped one person who was wrongly sent a demand for over £5,000.
‘This is the fourth time a major supplier has caused customer service misery as a result of a new billing system. It is these problems... that underpins the lack of trust in
‘Appalling treatment’
suppliers and it is high time the industry learnt from its mistakes.’
Ofgem has referred the ‘big six’ energy companies to a full-blown investigation by the Competition & Markets Authority amid claims the UK energy market is broken.
There are concerns families are paying rip- off prices and getting poor service because the major companies are effectively operating as a cosy cartel, rather than competing. One victim of ScottishPower’s appalling service was bank manager Carol Sheridan, 58, who switched from the company to the cheaper First Utility in August.
The switch went through successfully, but ScottishPower continued to bill her – even though her online account showed she was £996.47 in credit. Her calls and emails asking for a refund were ignored.
Carol, who lives in Ormskirk, Lancashire, says: ‘I have never been treated so appallingly. How can they be allowed to hang on to such a huge amount of my money?’
It was not until Money Mail intervened that she received a £773.79 refund and £100 in compensation.
Figures from Citizens Advice show complaints from ScottishPower customers have doubled since the start of this year, taking them up to 256 per 100,000.
It was the second most complained about energy firm behind Npower, where the introduction of a new billing system also descended into chaos.
ScottishPower has been told it must speed up the answering of calls and reduce the number of overdue bills from 75,000 to 30,000 by the end of December.
It must also completely remove the backlog for acting on Ombudsman decisions for individual complaints by the end of November.
Ofgem warned: ‘If it misses any of its targets its proactive sales activities will instantly be suspended.’
ScottishPower’s chief executive, Neil Clitheroe, said: ‘I would like to apologise unreservedly to any customer who has not received the level of service that they deserve f rom ScottishPower i n recent months and provide my personal assurance that we will do what we can to correct every problem, pay appropriate compensation and ensure t hat no customer is disadvantaged.’