Scottish Power to pay out £1.5m to customers who were overcharged

SCOTTISH Power is to pay customers £1.5 million in refunds and compensation after it charged them more than the price cap during the height of the energy crisis.

The firm charged a total of 1699 direct debit customers a higher rate between 2015 and 2023, across 11 price cap periods, when that rate should only have applied to those who pay by standard credit, or on receiving a bill.

Scottish Power overcharged the customers on average £149 during the eight-year period.

Ofgem said Scottish Power is to pay a total of £250,000 in direct refunds to affected customers, as well as another £250,000 in goodwill payments.

This equates to an average of £294 per customer. All payments will be made automatically, and customers do not need to do anything. Scottish

Power said it had discovered that operational errors had led to the mistake, and reported itself to Ofgem last summer.

The power company has also agreed to pay £1 million to Ofgem’s Energy Industry Voluntary Redress Fund, which benefits charities and community projects that help vulnerable customers with energy-related support.

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.

“The price cap is there to protect consumers, and we take seriously any breaches of the safeguards we have put in place.

“Suppliers must be vigilant and act quickly to resolve billing errors that impact customers. We will continue to closely monitor all suppliers and will hold them to account if they do not meet the standards we set.”

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 and the Government had to step in to provide support.

“Looking after our customers is at the heart of everything we do and our immediate notification to the regulator, swift corrective action and the compensation package agreed with Ofgem show both how seriously we take this matter and our commitment to making it right.”