Scottish Power hit with £18m fine for failing customers

Scottish Power has agreed to pay £18 million after an Ofgem investigation found that the supplier failed to treat its customers fairly, resulting in more than 1 million complaints between June 2013 and December 2015.

The money will be paid to vulnerable Scottish Power customers that were affected by customer service issues (up to £15 million), and the remainder will go to charity.

The Ofgem investigation into the supplier’s complaint resolution, call handling and billing processes, during and following the supplier’s implementation of a new IT system found that many customers had experienced unacceptably long call waiting times. Thousands of Ombudsman rulings were not implemented within the required 28 days.

Scottish Power’s failures also resulted in more than 300,000 customers receiving late final bills, meaning some customers did not promptly receive money they were owed

Ofgem chief executive Dermot Nolan said: “Scottish Power 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 £18 million 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.”

Service improvements

Scottish Power chief executive of energy retail and generation Neil Clitheroe said: “We apologise unreservedly to those customers affected.

“In order to upgrade our old IT systems, we invested £200 million on new technology to allow us to deliver smarter digital products and services to benefit our customers. During the complex transition between systems we encountered a range of technical issues. This lead to an unacceptable increase in complaints and reduced the quality of our customer service.

“I gave a guarantee that no customer would be left out of pocket by these issues and we continue to compensate customers who have been affected. Additional customer service advisors were added and we extended our opening hours to the longest in the industry in order to improve our customer service levels.

“With our new IT system now fully in place, our service performance has significantly improved and customers will start to see real benefits in managing their accounts. Newly developed digital services have been launched, such as online payment adjustments and refunds, which would not have been possible on our old system.

“We know we need to do more and we will continue to work hard to deliver further improvements, and ensure that our customer service standards return to being amongst the best in the industry.”

Since Ofgem opened the investigation, Scottish Power has improved its customer service. The average call waiting time, rate of abandoned calls and the number of Ombudsman cases have all more than halved, and the number of late bills has fallen by 75 per cent.

Ofgem said Scottish Power had been “cooperative throughout the investigation”.