iSupply to pay out £1.5m after breaching price cap

Challenger brand iSupply Energy will pay £1.5 million into a voluntary redress fund after breaching the price cap and overcharging customers around £36,000.

Ofgem said iSupply, which was acquired by Swedish energy group Vattenfall in 2017, also failed to alert the energy regulator to the breach or put things right quickly.

For the first price cap period (January to March), iSupply overcharged around 4,400 customers £36,270 in total. For the second price cap period (April to September), 25 customers were collectively overcharged by £53.

Ofgem revealed that senior employees were aware of the breach in January 2019 but did not report the issue. In August, however, a whistleblower came forward with credible information, supporting Ofgem’s own monitoring and compliance activities on the issue.

The regulator found that iSupply had insufficient governance and processes in place to prevent and swiftly address the non-compliance. It did not correct customers’ tariffs or issue refunds to those affected in a timely manner.

Affected customers have since been refunded and iSupply 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.

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.”

In April this year, 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 affected.

In response to today’s announcement Gillian Guy, chief executive of Citizens Advice, said: “We’re pleased to see that iSupply has not only refunded the customers it overcharged, but is also paying this voluntary amount into Ofgem’s redress fund.

“iSupply has promised to improve the way it’s run to make sure this cannot happen again. Ofgem, as the regulator, must make sure that they keep to their word.

“This is the second time in a year that iSupply has failed to charge customers correctly. It underlines why Ofgem’s proposed stricter regulations for new and existing suppliers should be put into effect as soon as possible.”