19th June 2014
The energy regulator Ofgem has warned utility giant Npower that it must “take immediate action” to resolve its billing and complaints issues by the end of August.
Ofgem has also instructed the “big-six” provider to launch a wider investigation into its customer service failings under its new Standards of Conduct
It also has to publish progress updates on its website and if it fails to meet its new monthly progress targets Npower will have to stop all proactive telesales to new customers until they are met.
The investigation into Npower’s customer service failings is the first case to be opened under Ofgem’s new Standards of Conduct and could lead to a financial penalty or redress payment if they are found to have broken rules.
Sarah Harrison, senior partner in charge of enforcement said: “Npower customers have suffered service failures for too long, that’s why Ofgem has secured binding commitments from Npower to reduce its bill backlog or face curbs on sales, alongside launching a wider investigation under Ofgem’s new Standards of Conduct.
“Ofgem has been monitoring Npower’s service closely and we have been increasingly concerned about the slow progress to tackle failings. Npower’s recovery plan has not delivered as far and fast as is necessary. Our analysis of complaints data also raises some serious concerns which will be thoroughly examined in our investigation”.
There has been some progress since Ofgem’s intervention in December, it stated that longstanding problems in relation to new customers and the set-up of direct debit payments have now been tackled, and many of the oldest cases of late billing have been cleared.
This move follows Ofgem’s intervention in December 2013 which led to an apology by Npower’s chief executive office Paul Massara to all its customers, payment of £1m to good causes, and a commitment that no customer would be left out of pocket as a result of billing.
In a statement Paul Massara, Npower CEO said: “We are committed to getting things right for our customers but recognise that despite the progress we have made our current billing standards have fallen short of where everyone wants them to be. We are happy to provide the assurances agreed with Ofgem, with whom we share the same objective of getting our customer service to where it needs to be. We will cooperate with Ofgem on the investigation they have announced. We are confident that the measures we are already taking and the additional resource announced today will bring our customer service back to normal levels of performance by the end of August.
“If we have not met this late bill target by then, we will suspend all outbound telesales activity to new customers and not sell additional fuels to existing single fuel customers until we do. I want to reiterate again that our customers should not lose out financially as a direct result of our billing system problems and that if customers are worried about a high bill we’ll work with them to reach a suitable payment plan.”
Commenting on the issue Tom Lyon, energy expert at comparison site, uSwitch added: “Billing issues are one of consumers’ biggest gripes with the industry. We recently found that a fifth of households have been billed incorrectly by energy suppliers in the last year, and companies are taking longer than ever to resolve complaints.
“Customer service is becoming an increasingly important factor in the decision to switch energy supplier; consumers want to feel valued, as well as getting a better deal, so it’s vital that energy companies put customers at the heart of what they do. It is encouraging to see that Npower’s recovery plan is delivering improvements, but we encourage them to do more.”
The latest energy complaints league table, published by Citizens Advice and Citizens Advice Scotland, based on complaints made in October to December 2013 found: