iSupply to pay £1.5 million for failing to treat customers fairly and price cap overcharging
iSupply Energy Ltd is to pay £1.5 million after the supplier overcharged around 4,400 of its customers on default tariffs and failed to alert the regulator and put things right quickly.
The price cap for 11 million customers on default tariffs came into force on 1 January 2019. All suppliers are required to charge their default tariff customers at or below the level of the cap to ensure they pay a fair amount for their energy.
For the first price cap period (January to March 2019), iSupply overcharged around 4,400 customers £36,270 in total. For the second price cap period (April to September 2019), 25 customers were collectively overcharged by £53.
Senior employees at iSupply were aware of the breach in January 2019 but did not report the issue to Ofgem.
A whistleblower came forward to Ofgem in August 2019 with credible information, supporting Ofgem’s own monitoring and compliance activities on the issue.
Ofgem has found that iSupply had insufficient governance and processes in place to prevent and swiftly address such non-compliance. iSupply did not correct customers’ tariffs or issue refunds to those affected in a timely manner.
iSupply has since refunded customers it overcharged and has agreed to pay £1.5 million into Ofgem’s voluntary redress fund for its failings.
The supplier has also confirmed it has improved its governance and processes and will continue to invest in process and systems change to ensure that these or similar issues do not reoccur.
Ofgem has decided not to take formal enforcement action after considering the steps iSupply has taken to address its failings and the redress it has agreed to pay.
Ofgem closely monitors all suppliers’ conduct, including their approach to the implementation of the cap, and will continue to hold suppliers to account if they do not meet their obligations.
Anthony Pygram, director of conduct and enforcement at Ofgem, said:
“If a licensee breaches the rules, it quickly needs to tell Ofgem and put things right for its consumers. However, iSupply has admitted it failed to do so in this instance.
“Suppliers must charge their default tariff customers at or below the level of the price cap. Senior staff at iSupply knew that they were overcharging default tariff customers yet failed to refund them and report the issue to Ofgem in a timely manner.”
“The action we have taken against iSupply sends a strong message that all suppliers must treat their customers fairly and quickly address known harm so that customers are protected, or face the consequences.”
Notes to editors
- Ofgem relies on a range of information to support its enforcement work, including information disclosed by whistleblowers. Ofgem takes disclosures provided by whistleblowers seriously, and encourages those with genuine concerns about wrongdoing, risk or malpractice that you are aware of through your work, to come forward with relevant information.
- Ofgem’s Enforcement Guidelines set a clear expectation that licencees should promptly self-report potential breaches to the regulator, particularly where these may give rise to material harm to consumers, the market or to Ofgem's ability to regulate.
- About 11 million households are protected by the default tariff cap, which came into effect on 1 January 2019. The cap is temporary, and applies to tariffs for all customers on standard variable and default energy tariffs.
- In April 2019, Ofgem closed a compliance case with iSupply after it reported that it overcharged customers on pre-payment meters (PPM), who are protected by the PPM price cap. iSupply paid compensation and refunded those customers affected.
- For more information about Ofgem’s voluntary redress fund, see: Ofgem appoints Energy Saving Trust to distribute payments from rule-breaking energy companies to charities
- More information on the default tariff cap can be found on our website.
- More information on whistleblowing to Ofgem can be found on our website.
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