ScottishPower fined £18m for customer service failings
The energy giant has agreed to pay £18m after the regulator, Ofgem, found it had failed to treat customers fairly.
An Ofgem investigation found that its call handling, complaint resolution and billing were found to be “inadequate” during and after ScottishPower upgraded its IT systems.
It comes after the provider was hit with a sales ban in March last year for failing to reach customer service targets following shortcomings identified by Ofgem.
The regulator said the ‘Big Six’ supplier had insufficient contingency plans and it didn’t do enough to protect its customers from issues that arose from the implementation of the new IT package.
As a result, the number of complaints made to ScottishPower rose by over a million between June 2013 and December 2015.
Ofgem added that ScottishPower handled some of these complaints poorly with a significant number taking too long to resolve, many customers experiencing unacceptably long call waiting times and many calling multiple times but hanging up before getting through.
Once complaints had been escalated to the Ombudsman, Ofgem said thousands of these rulings weren’t implemented within the required 28 day limit.
Further, ScottishPower’s failings resulted in over 300,000 customers receiving late final bills which meant that some did not receive their money back promptly.
A strong message to all energy companies
Following the investigation, ScottishPower has agreed to pay £15m to vulnerable customers affected by the issues and the remaining £3m will go to charity.
Dermot Nolan, Ofgem chief executive, said since the investigation, the provider has improved its customer service and the average call waiting time, rate of abandoned calls and number of Ombudsman cases have reduced by more than half.
Nolan said: “ScottishPower let its customers down during the implementation of a new IT system. When things went wrong, it didn’t act quickly enough to fix them. This created frustration and worry for many customers, who also wasted a lot of time trying to contact the supplier by phone.
“The £18m payment sends a strong message to all energy companies about the importance of treating consumers well at all times, including while new systems are put in place.”
‘We apologise unreservedly’
Neil Clitheroe, ScottishPower’s CEO of energy retail and generation, said: “We apologise unreservedly to those customers affected.
“We know we need to do more and we will continue to work hard to deliver further improvements, and ensure that our customer service standards return to being amongst the best in the industry.”
Clitheroe added that with its new IT system now fully in place, customers will start to see “real benefits in managing their accounts” such as with online payment adjustments and refunds, which would not have been possible on its old system.