Scottish Power fined £18m for poor customer service that prompted one million complaints

Scottish Power failed to get even the basics of customers service right

Scottish Power’s failures also resulted in over 300,000 customers receiving late final bills (PA)

Scottish Power has agreed to pay £18 million for failing to treat its customers fairly.

The fine – of which up to £15 million will be paid to vulnerable Scottish Power customers and £3 million to charity - is the third biggest penalty given to one of the major six energy providers. It follows an investigation by the industry regulator Ofgem into the firm’s customer service.

Scottish Power's call handling, complaint resolution and billing were all below the basic level of standards required, the investigation concluded. The poor service resulted in over 1 million complaints between June 2013 and December 2015.

Dermot Nolan, Ofgem’s chief executive, said the £18 million payment sends a “strong message” to energy companies.

“This is a significant amount of money. It’s basically because Scottish Power failed to treat its customers fairly over a sustained period of time,” he told the BBC.

Customers took to Twitter after the announcement to express their anger.

One said the penalty was well deserved as Scottish Power customer service left an elderly relative “terrorised”.

Others said they were glad their complaints had finally been taken seriously.

Scottish Power, which collaborated with Ofgem throughout the investigation, said its service failing were linked to the implementation of a new IT system.

Neil Clitheroe, CEO of energy retail and generation at Scottish Power, said the issued had occurred when Scottish Power invested £200 million on new technology. During the transition between systems the company encountered a range of technical issues, which lead to an “unacceptable” increase in complaints and reduced the quality of customer service, he said.

“I gave a guarantee that no customer would be left out of pocket by these issues and we continue to compensate customers who have been affected. Additional customer service advisors were added and we extended our opening hours to the longest in the industry in order to improve our customer service levels,” Clitheroe added.

But Nolan said the energy provider should have acted on it immediately.

“When things went wrong, it [Scottish Power] 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.

“The £18 million 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,” Nolan said.

Many customers experienced “unacceptably” long call waiting times with many calling multiple times and hanging up before getting through. Scottish Power’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.

Scottish Power said now the new IT system are in place their service has “significantly improved.”

In December, Ofgem ordered Npower to pay £26 million for sending out inaccurate bills and failing to correctly deal with complaints.