npower and Scottish Power are in trouble over complaints again

They're on OfGem's naughty step, but complaints handling across the industry was found to be poor. Is it now time to complain about OfGem?

James Moore
Thursday 22 September 2016 16:55 BST
The energy industry has taken another kicking from its regulator
The energy industry has taken another kicking from its regulator

The energy sector could probably rival the railways for the title of the privatisation that has most made life miserable for the poor consumer.

Providers have faced a torrent of criticism, richly deserved criticism, over tariffs, billing, the way they treat poorer customers, and so on and so on.

The latest grim news comes courtesy of OfGem, the sector’s regulator. Every two years it commissions a survey which compares how energy suppliers deal with complaints from domestic and micro business customers.

While they have halved in number since 2014, as they should have given the crazy levels at which they were running, those that do complain are still not faring well.

In fact, Ofgem’s survey shows that the overall level of satisfaction with suppliers’ complaint handling has fallen significantly.

It should surprise no one that Scottish Power and npower come out worst when considering the performance of individual companies (along with First Utility). I say that because just three weeks ago I highlighted a report from Citizens Advice which revealed that the aforementioned pair were in the bottom four when it comes to complaints ratios, that is, the number of complaints per 100,000 customers.

One positive to come from OfGem's survey is that 59 per cent of Scottish Power and 71 percent of npower complainants said they had or were planning to switch supplier as a result of their experiences.

That, you may feel, is a thoroughly good thing. Until you realise that complaints handling is poor across the industry so they may simply end up exchanging frying pans for fires when they switch.

Even the suppliers that fared best - SSE, E.ON and EDF - failed to show significant improvement over the two years covered by the survey. And E.On has just paid out £3.1m to customers and energy charities after its agents missed appointments they were required to keep under the regulator's guaranteed standards.

OfGem says that only a third of customers across the industry were given a named contact at their suppliers. Some forty-two percent of complainants whose cases had been closed by their supplier were left feeling that their issues remained unresolved.

Not a pretty picture and Ofgem chief executive Dermot Nolan has written to the chief executives of energy companies to tell them he’s very cross. Sorry, he has written to them “to make clear that their results are unacceptable and to ask them to respond publicly setting how they have made, and intend to make, improvements”.

Meanwhile First Utility and Utility Warehouse, who performed next worst in the survey, will have to arrange for independent audits of their complaint handling procedures and then make the results available to Ofgem for publication.

Due in part to their failures, npower had to pay out £26m in December last year and Scottish Power had to pay out £18m in April.

The survey sample was taken before the end of the enforcement cases against those companies so OfGem is not taking further action. Luckily for them.

But this is yet another shabby story about a shabby industry. Is OfGem doing enough to bring it to heel? Perhaps energy customers might like to speak to its complaints department?

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