Energy Suppliers Pay for Failing Customers
Two of the UK’s energy suppliers have been fined a combined total of £740,000 by energy industry regulator Ofgem. One offence was the overcharging of customers on default tariffs, with the other involving private tenant failings.
The two companies fined are Shell Energy and Green Star Energy.
Thousands of Customers ‘Overcharged’
Shell Energy will pay the slightly higher fine of £390,000 for overcharging thousands of customers. They are the first company to fall foul of the new price cap regulations for standard variable tariffs.
They overcharged around 12,000 customers on its default tariffs after the energy price cap was introduced in January this year. The fine represents compensation and refunds.
The industry watchdog have a energy price cap monitoring process and discovered Shell Energy had overcharged by more than £100,000. That was just for the first three months of the year once the price cap began in January. The overcharging affected both electricity and gas customer accounts.
Ofgem says 6,200 customer accounts were on tariffs where they were paying above the price cap for gas and electricity. Another 5,600 customer accounts experienced delays in their energy price being reduced to conform to the price cap. These customers had already requested a switch to a cheaper tariff, meaning they paid over the cap longer than necessary.
Shell Energy have agreed to refund all affected customers by re-crediting their accounts and will even pay additional compensation. The 6,200 overcharged customers will be refunded £10 per fuel in compensation.
Tenant Failings Land Small Supplier in Hot Water
Green Star Energy will pay a smaller amount of £350,000 for their indiscretions. Their failings include not updating records and not issuing welcome packs to over 1,800 tenants in privately rented accommodation.
The law says a customer moving into a property is entitled to receive a welcome pack. The pack will detail the tariff they’re on and provide details about their account. As this wasn’t provided, the customers were unable to switch tariffs. Green Star Energy say they didn’t supply the welcome packs due to a failure to update its records.
A total of 1,829 tenants were affected. They were unable to access their accounts so they couldn’t switch tariffs, thus remained on more expensive tariffs for longer. Green Star’s compensatory payment will see £110,000 go directly to affected customers and the rest into the energy redress fund.
Tough Requirements for New Suppliers
Ofgem said in April they were introducing new regulations to ensure the sustainability of prospective new energy suppliers. This was in response to a spate of small energy suppliers going bust over the last couple of years.
The new energy supplier regulations came into force this month, and so new suppliers will properly vetted from now on.
To learn more about different energy suppliers and tariffs, contact Business Save and their team of highly experienced energy experts.