E.ON, Npower and Utilita rapped by regulator over failings
Under energy regulator Ofgem rules, customers are able to switch supplier if they’re within 49 days of the contract coming to an end.
However, E.ON and Npower wrongly told customers whose contract was due to end that they’d incur exit fees if they switched supplier within the 49 day window.
Ofgem found that between June 2016 and February 2017, Npower sent 22,000 customers letters with the incorrect information. E.ON call centre staff wrongly told 450 customers that they would incur fees for switching within 49 days before their fixed contract ends.
However the regulator added that it did not find any instance of customers wrongly being charged the exit fees as a result of the misinformation.
As a result, the energy giants have taken steps to put things right. E.ON has updated its call centre scripts, and paid £21,000 redress to customers who consequently cancelled or delayed switches.
Npower has corrected the letter it sends to customers during the ‘switching window’, and in March compensated four customers who cancelled their switches as a result of receiving an incorrect letter.
An E.ON spokesperson said: “We’ve identified and said sorry to 450 customers, across a three-year period, whom we incorrectly advised would face exit fees if they switched away from us during a period where they were protected from such charges due to Ofgem regulations. We’ve worked with Ofgem to ensure we have taken the correct steps to put this mistake right and have paid a total of £21,000 to the affected customers as compensation for our error.”
An Npower spokesperson, said: “We’re sorry that between June 2016 and February this year, we wrote to some customers incorrectly stating they would be charged an exit fee. No customers were actually charged a fee.”
What about Utilita?
Utilita has refunded a total of £3.61m for mistakenly overcharging prepayment customers.
Due to a technical issue, Utilita failed to implement a price cut to a new prepayment meter safeguard correctly. This meant around 348,000 customers were overcharged to the tune of £3.54m.
Utilita became aware of the issue in April and Ofgem said it quickly raised the problem with it.
The supplier has since addressed the issues so that it meets the prepayment safeguard tariff cap and it’s refunded all customers’ money lost due to the failures. A further £68,000 compensation was also paid.
Anthony Pygram, partner for consumers and competition at Ofgem, said: “It’s crucial that suppliers meet the level of the prepayment safeguard tariff cap for all eligible customers.
“Utilita acted quickly to engage with Ofgem, and has since resolved the issue and redressed customers who overpaid on their energy due to their failures. Taking into account these actions, we have decided to close this compliance case.”
Jem Maidment of Utilita, said: “We are very sorry for what was a genuine mistake. We are committed to giving the best service we can to our customers. When we identified the error, we acted immediately to correct the problem and started quickly refunding money to affected customers.
“We reported both issues to Ofgem as soon as possible and made sure we kept Ofgem fully updated throughout the process.
“All affected customers have been notified. Nearly all – 98% – have been refunded directly. Any remaining sums will be donated to charity.
“Ofgem has acknowledged our prompt action in coming forward, and that we have now resolved the issue. This has been reflected in its decision not to take any action.”