ScottishPower to pay £18m for customer service failings
ScottishPower has agreed to pay £18m concluding an Ofgem investigation into the supplier’s complaint resolution, call handling and billing processes, during and following the supplier’s implementation of a new IT system. The money will be paid to vulnerable ScottishPower customers that were affected by customer service issues (up to £15m) and the remainder to charity.
- ScottishPower failed to treat its customers fairly.
- Call handling, complaint resolution and billing were found to be inadequate.
- ScottishPower’s customer service issues resulted in over 1m complaints between June 2013 and December 2015.
- Since Ofgem’s intervention, ScottishPower’s customer service has considerably improved.
Ofgem found that ScottishPower failed to treat its customers fairly; it 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 system. This resulted in a significant increase in the number of complaints the supplier received. ScottishPower also handled some of these complaints poorly with a significant number taking too long to resolve.
Many customers experienced unacceptably long call waiting times with many calling multiple times and hanging up before getting through. Thousands of Ombudsman rulings were not implemented within the required 28 days. ScottishPower’s failures also resulted in over 300,000 customers receiving late final bills. This meant some customers did not promptly receive money they were owed.
Since Ofgem opened the investigation, Scottish Power has improved its customer service. The average call waiting time, rate of abandoned calls and the number of Ombudsman cases have all more than halved. The number of late bills has fallen by 75%. ScottishPower has been cooperative throughout the investigation.
Dermot Nolan, Ofgem chief executive said: “Scottish Power 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.”
Notes to editors
Investigation into Scottish Power’s compliance with Standards of Conduct (SLC 25C), SLC 27 (provision of final bills), and the Gas and Electricity (Consumer Complaints Handling Standards) Regulations (CHRs) 2008
In November 2014, Ofgem launched the investigation into ScottishPower which we are concluding yesterday. In parallel, Ofgem also required immediate action from Scottish Power by setting it three targets aimed at improving its complaints handling and customer services. In March 2015, ScottishPower stopped proactive selling for 12 days after Ofgem found that the supplier failed to meet the target to remove a backlog of outstanding Energy Ombudsman decisions.
The investigation covered three main areas:
Standard Licence Condition 25C – Ofgem’s principles-based domestic Standards of Conduct, which require suppliers to treat its consumers fairly. The Standards of Conduct cover supplier behaviour towards consumers, the information that suppliers provide to consumers, and the effectiveness of suppliers’ customer service arrangements;
The Gas and Electricity Consumer Complaints Handling Standards in relation to ScottishPower’s complaints handling processes; and
Standard Licence Condition 27.17 in relation to the issuing of final bills.
ScottishPower also promised that no customer would be financially disadvantaged as a result of the new IT system.
Ofgem is the independent energy regulator for Great Britain. Its priority is to make a positive difference for consumers by promoting competition in the energy markets and regulating networks.
For facts, figures and information about Ofgem’s work, see Energy facts and figures.
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