Scottish Power handed £18m customer service penalty

Energy provider ScottishPower has been handed a £18million penalty by regulator Ofgem because it failed to treat its customers fairly.

The group said it had agreed to pay the amount following an investigation into its complaint resolution, call handling and billing processes during and following the implementation of a new IT system. It said £15million will be paid to vulnerable ScottishPower customers that were affected by customer service failures with the remainder going to charity.

Ofgem found that ScottishPower failed to treat its customers fairly, had insufficient contingency plans and “didn’t do enough to protect its customers”. This resulted in a significant increase in the number of complaints the supplier received. ScottishPower also handled some of these complaints poorly with a significant number taking too long to resolve.

Ofgem said that many customers experienced unacceptably long call waiting times with many calling multiple times and hanging up before getting through. “Thousands of

Ombudsman rulings were not implemented within the required 28 days. ScottishPower’s failures also resulted in over 300,000 customers receiving late final bills. This meant some customers did not promptly receive money they were owed,” it added.

However, it said that since Ofgem opened the investigation, Scottish Power has improved its customer service. The average call waiting time, rate of abandoned calls and the number of Ombudsman cases have all more than halved. The number of late bills has fallen by 75%. It said that ScottishPower has been cooperative throughout the investigation.

“Scottish Power let its customers down during the implementation of a new IT system. When things went 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,” said Dermot Nolan, Ofgem chief executive. “The £18m payment sends a strong message to all energy companies about the importance of treating consumers well at all times, including while new systems are put in place.”

Neil Clitheroe, ScottishPower’s chief executive of Energy Retail and Generation, said: “ScottishPower 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 lead to an unacceptable increase in complaints and reduced the quality of our customer service.”