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14 Jun 2019

Shell Energy customers owed compensation

First Utility overcharged customers on default tariffs by £100,000

Around 12,000 Shell Energy customer accounts will receive compensation after First Utility - Shell Energy's name before its recent rebrand - overcharged them between January and March this year.

Customers on First Utility's default tariff should have been charged in line with the price cap from the beginning of the year. But energy regulator Ofgem found that some were overcharged by a combined total of £100,736.63.

Affected customers will be refunded their overpayments, plus compensation.

Read on to find out how to tell if you're due compensation and how to get it. Or use Which? Switch to compare gas and electricity prices and find the best energy firm for you.

Shell Energy customers: are you due compensation?

Around 6,200 customer accounts paid above the level of the price cap for electricity and/or gas between January and March. If you were on First Utility's default or standard tariff at this point, you may be among them.

If your fixed deal had ended and you didn't choose another tariff, it's likely that you will have been on the standard tariff.

A further 5,600 customers who asked to change to a cheaper way of paying for their energy had their requests delayed. Ofgem said that this meant they were paying above the cap level for longer than necessary.

Direct debit is usually a cheaper way to pay your energy bill than paying once you receive a bill. So if you applied to do this, you may be due compensation.

I was a First Utility customer: how much compensation do I get?

If you were overcharged on the default or standard tariff, Shell Energy will compensate you £10 per fuel, plus the amount you overpaid.

If your request to pay by a cheaper method was delayed, Shell Energy will compensate you £5 per fuel, plus refund the amount you overpaid.

In total, Shell Energy will pay out £390,000:

  • £190,000 in refunds and compensation to customers
  • £200,000 payment to Ofgem's redress fund to support vulnerable customers.

When will First Utility and Shell Energy customers be paid?

Shell Energy told us that some customers have already received refunds and compensation. Others will receive theirs in the next couple of weeks.

Customers will be contacted by email to tell them that they are due a refund. Again, you should receive this in the next couple of weeks if you haven't already.

Shell Energy customer services can be contacted on 0330 094 5800 from 8am to 6.30pm Monday to Friday, and 9am to 4pm on Saturday. Live chat is available on the 'Contact us' section of Shell Energy's site.

I switched away from First Utility or Shell Energy: will I get compensation?

Yes. Shell Energy told us that you'll be contacted by email or letter (according to your preference) if you're due compensation. It will be paid to you either by bank transfer or cheque.

First Utility and Shell Energy: what customers think

First Utility ranked mid-table in our most recent energy companies satisfaction survey. We conducted this before it rebranded to Shell Energy, but its tariffs and customer service didn't change.

Customers rated the accuracy and clarity of its bills highly but found it less useful for helping them understand and reduce their energy use.

The best firm was rated five stars across the board, including for value for money.

Find out more about what customers think of Shell Energy.

Shell Energy's response

Colin Crooks, Shell Energy Retail CEO, said: 'We'd like to apologise to all customers who were temporarily out of pocket. For the vast majority of our customers we implemented the cap in line with Ofgem's licence conditions. We had a small number of customers on fixed-price default tariffs to whom we didn't apply the capped rates because most of these customers would have been better off remaining on their existing tariff.

'However, we recognise that there were some who would have been better off on the capped rates or who suffered a delay in changing their payment method. We always intended to re-credit these customers, which we are now doing together with a compensation payment, and have agreed to pay into the Ofgem redress fund.