Household Bills
Npower ordered to resolve billing issues or stop telesales
Big Six energy provider npower has been told by regulator Ofgem to resolve “major billing issues” by the end of August or cease telesales operations.
Ofgem said that progress to tackle failings in the billing and customer services process had been far too slow since an intervention in December 2013, after which the regulator and provider agreed on the terms of a ‘recovery plan’.
The regulator has been monitoring npower due to concerns it was sending bills late, in some cases months after customers had switched providers.
As of this week npower is on a strict schedule, required to meet monthly targets between now and August and to publish progress reports on its website. If it fails to meet these targets it will be banned from actively pursuing new customers over the phone.
According to npower, late bills currently affect 280,000 of its customers across 414,000 accounts. This will be reduced to 65,000 customers and 100,000 accounts by the end of August, the firm said.
Ofgem also announced its intention open an investigation into npower’s “prolonged billing problems and complaint issues”.
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Sarah Harrison, senior partner in charge of enforcement at Ofgem, said: “Ofgem has been monitoring npower’s service closely and we have been increasingly concerned about the slow progress to tackle failings. 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.
“npower customers have suffered service failures for too long, which is why Ofgem has secured binding commitments from npower to reduce its bill backlog or face curbs on sales, alongside launching a wider investigation under Ofgem’s new Standards of Conduct.”
These Standards of Conduct, part of Ofgem’s energy market reforms, state that suppliers must treat consumers fairly. The investigation will also look into npower’s compliance with industry complaint-handling standards.
In statement, npower said it planned to invest an additional £20m in 2014 to resolve customer service issues.
Paul Massara, npower CEO, said: “We are committed to getting things right for our customers but recognise that despite the progress we have made our current billing standards have fallen short of where everyone wants them to be. We are happy to provide the assurances agreed with Ofgem, with whom we share the same objective of getting our customer service to where it needs to be.”
Massara said his company would co-operate with Ofgem’s new investigation and expressed confidence that npower would meet its August goal.
“I want to reiterate again that our customers should not lose out financially as a direct result of our billing system problems and that if customers are worried about a high bill we’ll work with them to reach a suitable payment plan.”