Simon Read: More Scottish Power customers are out of pocket over high-street warranty deal

A major campaign has been launched to force the gas and electricity giant to repay £75m to 625,000 customers who lost out

Scottish Power serves 3.5 million homes in the UK (Getty Images)

There was fresh woe for troubled Scottish Power this week after campaigners wrote to MPs about a £75m warranty misselling scandal stretching back 15 years. The energy supplier has been under fire from readers after a customer services upgrade left tens of thousands of people facing the wrong charges or other problems.

Now a major campaign has been launched to force the gas and electricity giant to repay £75m to 625,000 customers who were left out of pocket when a warranty deal offered through Scottish Power shops failed to pay out.

The compensation claims come from people who bought electrical goods, such as fridges and cookers, from Scottish Power’s chain of 150 high-street stores. They were sold a PowerPlan warranty scheme, which promised to refund the cost of the warranty after five years if customers had not claimed on it.

However, customers were left an average £120 out of pocket after the stores and Scottish Power’s insurance arm, Domestic Appliance Insurance, was sold to Powerhouse, which went bust in 2004.Scottish Power paid £6m to settle all claims in 2004 but campaigners, including a cross-party political group, have called on the Government to re-open the case against the firm in light of reports by two liquidators.

Alan Campbell, a company director from Glasgow, is leading the fight for justice. He claims the reports include damning evidence of wrongdoing by the firm. “I was shocked to find that Scottish Power has been putting legal pressure on the liquidators to keep them quiet,” he said. “However, I am not gagged and I want to bring the liquidators’ evidence into the public domain, so that people can see that Scottish Power acted dishonestly and mis-sold cashback and is still lying to cover up even now!”

Mr Campbell has published the reports from the MacDonald Partnership and KSA Group at ScottishPowerBrokenPromises.co.uk, and he says: “I want t o help people to get their money back and for the authorities to bring those personally responsible to account.”

More than 800 customers of the collapsed scheme wrote to their MPs last week highlighting the scandal. The cross-party group will meet in the next few weeks to take up the investigation. Andrew Percy, the Conservative MP for Brigg and Goole, who is a member of the all-party group, said: “While the individual claims may not mean much to Scottish Power, the sums mean a great deal to my constituents. I will be doing what I can to ensure that they get their money back.”

A spokesman for Scottish Power said: “The PowerPlan scheme, which was one of a number of very similar schemes offered by retailers across the industry in the late 1990s and early 2000s, did not involve any wrongdoing by Scottish Power.

“Scottish Power emphatically rejects any suggestion of improper conduct. The scheme is currently the subject of threatened court proceedings and it is accordingly inappropriate for Scottish Power to comment further.”

Energy is unaffordable for millions of homes

Energy firms were also thrust back into the spotlight this week after the new Energy Secretary, Amber Rudd, wrote to the “big six” suppliers to ask whether their prices reflected the companies’ costs. In other words, isn’t it time for a price cut?

In recent weeks, I’ve warned readers that some firms are increasing direct debits to take account of winter underpayments, just at a time when energy costs should be falling as we all turn off our central heating.

If you haven’t checked, I suggest you do so, and if your direct debit has climbed, arrange to have it reduced. But not to too low a level or you could end up owing your supplier money, as millions already do. Figures published this week revealed that almost four million UK homes are in debt to their energy suppliers – that’s some 260,000 more than there were last year.

It means we now collectively owe energy providers £507m – which is up by 9 per cent from £464m a year ago, according to the figures produced by uSwitch. The average debt per household has climbed by £2 to £130, but it is alarming that it is still going in the wrong direction.

Ann Robinson, director of consumer policy at uSwitch, warned: “Pre-payment meters were forcibly installed in almost 100,000 homes last year due to debt, yet our figures suggest this could be the tip of the iceberg. This is evidence that energy has become unaffordable for millions of homes. People are still under relentless pressure just to cover the cost of essential bills.”

This is the crux of the matter. Heating and lighting our homes is not a choice but an necessity. The fact that so many people were forced to choose to leave their heating off so many times last winter because they could not afford to pay their bills is nothing short of a national scandal.

The Government and energy firms must redouble their efforts to ensure that those who are struggling can get the financial help they need, not more debt worries.

Check your bill: BT is still charging for handsets

Here’s a fresh BT charging warning: are you unnecessarily paying to rent a phone handset? The telecoms giant used to rent out home phones years ago, but when the prices of handsets came down, most people simply bought their own and cancelled their rental agreements. But not all did. Some contributors to the website Moneysavingexpert have admitted they have paid the fee for 20 years, leaving some up to £400 out of pocket. If you haven’t ever cancelled your rental contract, it will have rolled over on a monthly or quarterly basis ever since you first took it out. Check your bills to see if there is any charge listed under the heading “equipment rental”. If there is, you’ll have to contact BT to cancel. Is there any chance of a refund? It looks unlikely, but you can at least stop wasting more money.

s.read@independent.co.uk

twitter: @simonnread