ScottishPower Customers Net £18m Windfall

Big Six energy firm ScottishPower has agreed to pay out £18m after the energy regulator found it failed to treat customers fairly.

The bulk of the money - £15m – will be paid out to vulnerable customers that were affected by customer service issues with the remainder going to charity.

It (Other OTC: ITGL - news) is understood that around 100,000 customers will receive the money in their accounts, with sums averaging at £50-£150.

Ofgem said the way the supplier handled calls, resolved complaints and billed customers was inadequate.

It said customer service issues had resulted in more than one million complaints between June 2013 and December 2015.

Problems were linked to the implementation of a new IT system.

The regulator also pointed to unacceptably long waiting times, failures to implement ombudsman rulings on time and more than 300,000 customers receiving late final bills.

Ofgem said that since its intervention, service had considerably improved.

Dermot Nolan, Ofgem chief executive said: "ScottishPower 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."

Gillian Guy, chief executive of Citizens Advice, which provided evidence to Ofgem's investigation, said: "ScottishPower failed its customers not once but twice.

"Not only did the firm struggle to get people's bills right first time, it also failed to sort out the problems when customers tried to complain."

Neil Clitheroe, Scottish Power's chief executive of energy retail and generation, said: "ScottishPower has worked with Ofgem throughout this investigation. We apologise unreservedly to those customers affected."

Spanish-owned ScottishPower was in the spotlight over a separate controversy last week when it was accused by MPs over a "mis-selling scandal", involving electrical goods warranties, that they said had left 625,000 customers out of pocket to the tune of £75m.

The company said the MPs' findings were "factually and legally flawed".