Npower forced to give £3.5m to customers Energy company fined for breaking sales rules
20 December 2013
Npower has agreed to pay £3.5m towards helping vulnerable customers, after an investigation by energy regulator Ofgem found it breached sales rules on the doorstep and over the phone.
Ofgem's investigation into the sales practices of energy supplier Npower has found multiple breaches, including failing to gather enough information about prospective customers’ energy consumption when encouraging them to switch.
The energy regulator said the failings of doorstep and telesales staff meant that customers were unable to make informed decisions on whether to switch suppliers.
If you are an Npower customer and want to switch to a better deal, you can get a clear and impartial view of which energy tariffs are really cheapest for your home using Which? Switch.
No wonder there's a lack of trust
Which? executive director Richard Lloyd said: 'It’s absolutely right that Ofgem has punished Npower for its unacceptable past practices. With a history of behaviour like this in the industry it’s no wonder that fewer than one in five people say they trust energy companies.
'While Npower has since changed its sales processes, we hope this action from Ofgem sends a clear warning to all energy companies that bad practice will not be tolerated.'
Which? energy telesales investigation
Ofgem’s investigation began in August 2010 and covers sales activities that took place between October 2009 and July 2012.
During this time we ran our own investigations into telesales practices and found that several major energy suppliers were failing to offer callers the cheapest tariff or explain relevant exit fees.
In our August 2011 telesales investigation Npower came out well, but our most recent investigation in November 2012 saw it relegated to the bottom of the table. Only half of callers were told about exit fees they would be charged if they switched away early from the tariff they were being offered.
Latest in long line of investigations
The £3.5m payment will be split into payments of at least £25 for each of Npower's current customers who are 'core group Warm Home Discount payment recipients'.
This comes hot on the heels of another recent Ofgem investigation into customer complaints, which resulted in Npower apologising for billing problems and agreeing to pay £1m to vulnerable customers.
Back in January 2012 Npower was fined £2m by Ofgem for poor handling of customer complaints. British Gas was also fined following the same investigation.
If you feel you have been impacted or financially disadvantaged by Npower's billing problems you can call its customer service line on 0800 073 3000.