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.
For media, contact
- Michelle Amos: 020 7901 1881
- Media out of hours mobile: 07766 511470 (media calls only)
General enquiries (non-media)
If you are an energy customer looking for help and advice, including complaints about energy firms, please see our Household gas and electricity guide. Citizens Advice also provide a free, impartial helpline service across a range of issues on 03454 040506.
We also regularly share news and post general advice to help consumers get the most out of their energy services via our @Ofgem twitter and Facebook pages. If you have an enquiry or complaint relating to Ofgem’s policies or functions, contact us at firstname.lastname@example.org or on 020 7901 7295.
For all other non-media related enquiries, please visit our Contact us page.
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.
Latest News from
Ofgem appoints Octopus Energy to take on customers of Effortless Energy Ltd07/09/2020 13:15:00
Ofgem has appointed Octopus Energy to take on supplying Effortless Energy Ltd’s (trading as Go Effortless Energy) approximately 2,500 domestic customers and small number of non-domestic customers.
Ofgem fines SSE £2.06 million for failing to publish inside information about the wholesale energy market04/09/2020 13:15:00
The £2.06m fine, the first relating to the publication of inside information in energy markets in GB and the EU, sends a strong message to SSE, and other wholesale energy market participants, about the importance of fully complying with REMIT rules.
Ofgem protects customers of failed supplier Effortless Energy Ltd01/09/2020 15:15:00
Effortless Energy Ltd (trading as Go Effortless Energy), a gas and electricity supplier with around 2,500 domestic customers and a small number of non-domestic customers is ceasing to trade.
British Gas makes payments totalling £1.73 million for handling of changes to prepayment meter top-up arrangements27/08/2020 13:20:00
British Gas failed to notify around 270,000 prepayment customers about a change of top-up provider, from Paypoint to Payzone, which went live on 1 January 2020.
£1.2 million paid as SSE Energy Services failed to hit smart meter targets21/08/2020 12:20:00
SSE Energy Services missed its target to install gas and electricity smart meters for customers in 2019. Ovo Energy, which acquired SSE Energy Services in January 2020, will pay out £1.2 million for SSE Energy Services' historic issue.
Bulb to pay £1.76 million for compliance issues14/08/2020 13:15:00
Bulb failed to comply with Ofgem’s rules in three separate areas between 2017 and 2020, which affected around 61,000 customers.
Savings on energy bills this winter as price cap falls10/08/2020 13:15:00
The price cap will fall by £84 from £1,126 to £1,042 per year for the winter period (October-March). This is the lowest level of the cap since it was introduced on January 1 2019.
Ofgem publishes price cap decisions ahead of update05/08/2020 10:15:00
Ofgem has today published three decisions relating to the price protection provided to default tariff and prepayment customers following its statutory consultations published in May.