Scottish Power pays out £1.5m for overcharging customers

Scottish Power will pay out £1.5 million in refunds and compensation after overcharging customers over an eight-year period.

Between 2015 and 2023, the energy retailer mistakenly overcharged 1,699 direct debit customers a higher rate, which should only apply to those who pay by standard credit (on receipt of bill).

As a result, the average amount overcharged during this period was £149 per customer.

Scottish Power has since paid a total of £250,000 in direct refunds to those affected, plus another £250,000 in goodwill payments – equating to an average of £294 per customer.

It has also agreed to pay £1 million to Ofgem’s Energy Industry Voluntary Redress Fund.

Commenting on the matter Andrew Ward, chief executive of Scottish Power’s customer business, said: “We’re so sorry that a very small number of our customers were affected by this mistake and faced an increased financial burden – especially during a time when energy prices were reaching an unprecedented high and the government had to step in to provide support.

“Looking after our customers is at the heart of everything we do and our immediate notification to the regulator, swift corrective action and the compensation package agreed with Ofgem show both how seriously we take this matter and our commitment to making it right.”

Dan Norton, Ofgem’s deputy director for price protection, said: “The last few years have been challenging enough for energy customers facing increasing cost of living pressures, without the additional hardship of being overcharged. The price cap is there to protect consumers, and we take seriously any breaches of the safeguards we have put in place.

“Suppliers must be vigilant and act quickly to resolve billing errors that impact customers. We will continue to closely monitor all suppliers and will hold them to account if they do not meet the standards we set.”