The energy giant was found to have sent out 1.15 million inaccurate and misleading annual statements to 580,000 pre-payment meter customers between June 2014 and September 2015.

As part of the energy regulator’s investigation into SSE which launched in November 2017, Ofgem revealed that due to a coding error, annual statements included incorrect information about the cheapest tariffs available to customers.

Further, it included incorrect estimates of how much customers could save annually by switching to them. As such, some statements overestimated annual savings which could be made by switching from a pre-pay meter to a standard credit meter paying by direct debit, as well as by moving to paperless billing.

SSE initially reported the issue to the regulator last year and while Ofgem said a large number of incorrect mailings were issued, the level of harm “was low as only a small proportion of those customers would have acted on the information by switching”. It added that the savings from such a move would also have been minimal.

However, Ofgem said SSE failed to act promptly to put things right and it failed to put in place arrangements around customer communications that were “complete, thorough and fit for purpose”.

But the regulator noted that SSE has since improved its processes to prevent this from happening again. It now carries out extra checks on customer communications before they’re issued.

SSE will pay the £1m to Ofgem’s consumer redress fund which helps vulnerable consumers.

Regret and disappointment

Gareth Wood, director of customer service operations at SSE, said: “We deeply regret the historic problems we identified with some annual statements for pre-payment customers, relating to a coding issue between 2014 and 2015. We proactively reported this to Ofgem once we became aware and, as Ofgem has recognised, we’ve put things right and now have stronger measures in place to help ensure it doesn’t happen again.

“Although we’re disappointed not to have met the high standards expected of us in this instance, we’re pleased that the matter has now been closed with a voluntary payment that will directly benefit vulnerable customers.”