iSupply to Pay £1.5m Fine for Price Cap Failings

By : Business Save |January 28, 2020 |Energy Blog |0 Comment

Energy supplier iSupply will pay £1.5 million compensation after they overcharged around 4,400 of their customers. The overcharge happened on default tariffs which the supplier failed to alert the regulator about.

There would be no overcharge without the price cap introduced last year, highlighting the problem the cap was introduced for. The price cap was intended to protect 11 million customers on default tariffs and came into force on January 1st 2019.

All suppliers were required to charge their default tariff customers at or below the level of the cap. This was to ensure the 11 million often vulnerable customers only paid a fair amount for energy.

iSupply Caught Overcharging After Price Cap

The main issue involves the first price cap period from January to March last year. During this time iSupply overcharged approximately 4,400 customers a total of £36,270. During the second energy price cap period from April to September last year, they only overcharged 25 customers for a collective £53.

Ofgem discovered that senior employees at iSupply were aware of the price cap breach but failed report the issue to them.

Supplier Guilty of ‘Insufficient Governance’

Ofgem had their own monitoring and compliance activities on the issue. However, their suspicions were confirmed when a whistleblower came to them in August last year, providing them with credible information.

Ofgem’s subsequent investigation found iSupply had ‘insufficient governance and processes in place’ that would have prevented the overcharging. Such failings also meant they did not quickly address their non-compliance. Ofgem says iSupply did not correct their customers’ tariffs or even issue refunds to those affected in a timely manner.

iSupply have since refunded all the customers it overcharged. They have also agreed to pay £1.5 million into Ofgem’s voluntary redress fund as compensation. The supplier also claims to have improved its governance and processes. They also say they will continue to invest in improvements to ensure these or similar issues do not reoccur.

Action Against iSupply ‘Sends a Strong Message’

Ofgem’s Director of Conduct and Enforcement, Anthony Pygram, 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.”

If you are interested in learning about the many different energy suppliers and tariffs, contact Business Save and their team of highly experienced energy experts.

 

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