Energy provider Scottish Power has been forced by Ofgem to pay out a total of £18 million, following large numbers of complaints about various aspects of their customer service.
The fine is the result of an 18 month investigation into Scottish Power’s customer service failings after the provider received more than 1 million complaints between June 2013 and December 2015.
Ofgem said: “Scottish Power has agreed to pay £18m concluding an Ofgem investigation into the supplier’s complain resolution, call handling and billing processes, during and following the supplier’s implementation of a new IT system.”
This fine is the third largest fine that Ofgem have imposed, following a £28 million penalty imposed on Drax Power in 2014, and £26 fine that Npower were made to pay last year. Npower’s fines were also the result of an investigation into customer service failings.
Of the £18 million paid, £15 million will be given directly to vulnerable customers who had been affected by the company’s failings, with the rest being given to charities.
The investigation found that Scottish Power’s complaint resolution times were less than acceptable.
“Thousands of Ombudsman rulings were not implemented within the required 28 days” said Ofgem in their report.
Further, some 300,000 Scottish Power customers received their bills later than they were meant to and as a result, “some customers did not promptly receive money they were owed” following complaints.
A lot of the issues Scottish Power’s issues came about as the result of the transitioning to a new IT system.
Ofgem’s Dermot Nolan said: “Scottish Power let its customers down during the implementation of a new IT system. When things when 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 customers well at all times, including while new systems are put in place.”
Ofgem did say that throughout the investigation, Scottish Power were cooperative, and that during its course, the number of customers receiving late bills fell by 75%.
Scottish Power’s retail chief, Neil Clitheroe, said: “Scottish Power has worked with Ofgem throughout this investigation. 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 led to an unacceptable increase in complaints and reduced the quality of our customer service.
“I gave a guarantee that no customers would be left out of pocket by these issues and we continue to compensate our customers who have been affected.”
This £18 million fine is far from the only financial penalty that Scottish Power have incurred as a result of these issues. Due to problems resulting from the IT system transition, they have already paid out £30 million to customers in order to compensate for various issues.
