Achi news desk-
Regulator Ofgem said yesterday that Scottish Power Energy Retail Ltd had “agreed the compensation package after the supplier confirmed it had mistakenly overcharged 1,699 direct debit customers between 2015 and 2023, which should only apply to those who pay by standard credit (on receipt of bill)”.
Ofgem said that when weighing up the compensation package, it had “considered the additional stress and financial hardship” Scottish Power’s mistake may have caused to customers.
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Andrew Ward, chief executive of Scottish Power’s customer business, said: “We’re sorry that a very small number of our customers have been affected by this mistake and face an increased financial burden – particularly at a time when energy prices’ n reaching a level never seen before. high and the Government had to step in to provide support.”
Ofgem said, although it described the error as a “serious matter”, the rectification package would have been “significantly higher” if Scottish Power had not reported itself to the regulator.
The average amount overpaid during this period was £149 per customer, Ofgem noted.
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He added: “As a result, Scottish Power has paid a total of £250,000 in direct refunds to affected customers, plus a further £250,000 in goodwill payments – which equates to an average of £294 per customer. All payments were made automatically, and customers don’t need to do anything.”
Scottish Power has also agreed to pay £1 million to Ofgem’s Energy Industry Voluntary Wrongdoing Redress Fund, “which benefits charities and community projects that help vulnerable customers with energy-related support”, it said. the controller.
Dan Norton, Ofgem’s deputy director for price protection, said: “The last few years have been challenging enough for energy customers facing rising cost of living pressures, without the added hardship of being overcharged. The price cap is there to protect consumers, and we take any breach of the safeguards we’ve put in place very seriously.
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“Suppliers must be vigilant and act quickly to resolve billing errors that affect customers. We will continue to monitor all suppliers closely and hold them to account if they do not meet the standards we have set.”
Ofgem noted that Scottish Power reported itself to the regulator last summer, when the energy supplier discovered that operational errors had led to the standard credit tariff being raised on direct debit customers.
The regulator added: “This overpayment initially started in 2015 and continued across 11 price capping periods until June 2023 – a period when energy prices reached historically high levels, prompting the Government to step in and provide additional support. In deciding this compensation package, Ofgem took into account the additional stress and financial hardship that Scottish Power’s error may have caused to customers during this period.
“While the error is a serious matter, the regulator has taken into account that Scottish Power has self-reported the issue and has put steps in place to address the failings. If Scottish Power had not self-reported and resolved the issues in a timely manner, the rectification package sought would have been significantly higher.”
Scottish Power said it reported the “technical error” – which it noted had “affected a small proportion (0.04%)” of its total customer base between 2015 and 2023 – “as soon as it was discovered last year” .
He added that he had taken “immediate action to rectify the matter”.
Mr Ward said: “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 shows how seriously we take the matter this and our commitment to get it right. .”
