Npower fined a record £26m for treating its customers badly
Utility giant Npower has been hit with a record fine for treating its customers unfairly over bills and for its handing of complaints.
The £26m fine is the biggest ever imposed on one of the big six utility companies by the industry regulator, Ofgem.
And industry observers say it sends a clear message to the giant utility companies that riding roughshod over customers will no longer be tolerated.
Over 500,000 customers were hit by the Npower’s billing problems, which ran from September 2013 to December last year.
The company had more than TWO MILLION complaints during this time, mostly over problems with bills.
Ofgem decided these were not handled correctly or fairly.
Npower customer compensation
Those customers considered to be the most unfairly treated will receive compensation from the £26m fine and will be contacted by Npower.
Some of the fine will also go to charity.
Problems for Npower began four years ago when it introduced a new IT system. Bills issued were often wrong and lacked any information about how they had been calculated.
Ofgem found that the company failed to deal properly with the huge volume of complaints from customers that resulted, and debts were chased that had already been challenged by customers, who were caused, “distress and worry” as a result.
Npower was also guilty, Ofgem found, of incorrectly recording many complaints as resolved.
Ofgem chief executive Dermot Nolan, said: "Npower failed its customers. Not only have its billing and complaint handling procedures been chaotic, it treated many of its customers poorly, which is completely unacceptable.
"Npower's management failed to act quickly enough to protect its customers when things went wrong with changes to its IT system."
Simon Stacey, Npower's managing director for domestic markets, said: "We are very sorry about what has happened and that is why we have agreed this significant package of customer redress.
"We’ve reduced complaints by nearly 70% since the beginning of this year and as part of this package of measures with Ofgem, we have agreed targets for significant sustainable customer service improvement that everyone at Npower is working tirelessly to achieve.”
Last month, Npower’s German parent company said Npower had made losses of £111m in the first three quarters of the year.
Are other energy suppliers any better?
The energy industry isn’t praised for its customer services; however, you can check out which suppliers are playing ball when it comes to treating their customers well.
We compare the customer service of all energy companies, so you can factor this in to your decision when switching energy suppliers.
Are you an Npower customer? Let us know if you have been affected by these sorts of issues? If you’ve got an issue then make a complaint on A Spokesman Said to make the company take notice.
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