Spark Energy faces £1 financial penalty

Ofgem has levelled a financial penalty of just £1 against Spark Energy after the supplier was found to have been in breach of its customer supply code.

The new market entrant agreed in February to pay £250,000 in redress after Ofgem found that Spark stopped customers from switching to other suppliers, wrongly transferred others to new suppliers without their consent, and fell short of billing and complaints standards.

And in addition to the redress payment, made to Citizens Advice and Citizens Advice Scotland, Ofgem said today that it will level a financial penalty of just £1.

The majority of the failings took place between June 2010 and October 2013, just a few years after the company began operations in 2007.
But Ofgem’s senior partner in charge of enforcement Sarah Harrison said in February that Spark’s inexperience in the market “is no excuse” for breaking the rules.

The high number of complaints against the supplier was picked up by the BBC’s Watchdog programme in 2013 and the Ofgem investigation began shortly afterwards. Since then, Ofgem said the supplier had “made significant progress” in putting new processes in place to resolve its issues.

“The £250,000 reflects the seriousness of the breaches but also Spark’s size, and that during the investigation it has worked hard to resolve the issues identified,” Harrison said.

Spark Energy said it has undergone a “wholesale restructuring” of its business, including an overhaul of its senior personnel and investment of around £2.5 million in order to double its customer care team from 60 to 120 people.

“In the final quarter of 2014, more than nine out of 10 customer complaints were handled within 24 hours, a massive improvement on the second quarter of 2013 figure of under 30 per cent, showing the progress that Ofgem has recorded,” the supplier said in a statement.