Financial News

  • 21 December 2013, 20:45

Npower To Pay 3.5m To Vulnerable Customers

Npower has agreed to pay 3.5m to vulnerable customers after an Ofgem investigation found the energy firm breached sales rules.

Regulator Ofgem said the failings of doorstep and telesales staff meant customers were not able to make informed decisions on whether to switch suppliers.

The company remedied the shortcomings by September 2012 but has agreed to make a payment of at least 25 to each of its customers who receive the Warm Home Discount.

Ofgem said npower gained insufficient information about a customer's consumption to enable them to decide whether to switch.

It also failed to ensure that comparisons between the price of npower's supply and that of the customer's current supplier were always based on the tariff that customers were on.

And information on when some consumers would receive their direct debit discount and how direct debit levels would be reviewed was also found to have been inaccurate.

Sarah Harrison, from Ofgem, said: "npower has done the right thing by stepping forward and recognising that, whilst it was making changes to improve its sales processes, weaknesses remained which affected consumers' ability to compare supplier offers fairly.

"These issues have been fully addressed by npower and Ofgem welcomes the company's actions and its agreement to pay 3.5m to directly benefit vulnerable consumers.

"Ofgem will continue to hold companies to account to ensure rules to protect energy consumers are met and that the market works for consumers in a simpler, clearer and fairer way."

Paul Massara, npower's chief executive, said: "We've worked very closely with Ofgem as they've investigated these previous issues. It's good to draw a line under this, so we can focus on our goal of becoming number one for customer experience by the end of 2015."

Consumer Focus director Adam Scorer said: "Mis-selling is the original sin of energy competition. Npower had misled customers by phone and on the doorstep from 2010.

"Ofgem is right to make sure action is taken and that companies compensate consumers directly."

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