Challenger energy brand Bulb has paid £1.7m ($2.2m) to 61,000 customer after a regulator found the company was failing to follow the rules in a number of areas, potentially to the detriment of its customers.
Ofgem, the energy regulator, said on Thursday Bulb had agreed to pay the £1.7m package of redress, refunds, and goodwill payments after an investigation found multiple compliance failings.
“Bulb overcharged some customers, and risked leaving vulnerable customers without access to essential network services, when it failed to comply with Ofgem's rules,” Ofgem chief executive Jonathan Brearley said in a statement.
“Our rules are designed to protect consumers, and suppliers must make sure they have the processes in place to comply with them if they are going to give their customers good service.”
Ofgem said Bulb was failing to properly follow the rules when it came to switching, billing, and the Priority Services Register (PSR), which is a list of elderly, sick, and vulnerable customers who are given priority service by energy providers due to their needs.
Bulb overcharged around 11,400 customers by £699,000, an issue that was uncovered in February this year. Bulb said in a blog post the issue was due to “an unusual power meter arrangement” where households have two meters. The company has paid back the overcharged bills and paid £675,000 on top of that to say sorry.
Around 3,800 people in Scotland who wanted to switch to Bulb were also unable to between 2017 and 2020 due to issues with Bulb’s processes. The company has paid £155,500 to those affected.
Earlier this year, Bulb reported itself to Ofgem after revealing it had sent incorrect PSR data to energy providers, resulting in over over 45,000 people being wrongly removed from the register.
Bulb’s own investigations found only around 900 of those removed experienced a power outage and concluded none of those affected suffered as a result of the mistake. It has paid compensation totalling £70,000 to those 900 affected none the less.
A spokesperson for Bulb said: “We recently fixed some issues which affected some of our members and potential members.
“At Bulb, we pride ourselves on the quality of our operations and technology, but we know there will always be ways we can keep improving. That’s why we’ve strengthened the Bulb team, boosted training, and put in place even more rigorous checks and verification processes.”
The company apologised to customers in a blog post and said: “We will do better.”
Ofgem has now closed its investigation.
“Bulb has since put things right with affected customers and put processes in place to make sure it can meet Ofgem's rules,” Brearley said.
Bulb was founded in 2015 in London to challenge the “Big Six” energy operators. It is one of the fastest growing energy companies in the UK, with over 1.7 million customers. The startup provides 100% renewable energy to customers and is 100% carbon neutral.
Bulb operates across the UK, Spain, France and Texas, US, and has over 800 staff. The company has raised more than £60m in funding to date.