OFGEM fines Scottish Power £18m after IT blunders result in shoddy customer service

Dermot Nolan
Dermot Nolan

Scottish Power has agreed to pay £18 million following an investigation by the regulator OFGEM into the supplier’s complaint resolution, call handling and billing processes, during and following the supplier’s implementation of a new IT system. 

The money will be paid to vulnerable Scottish Power customers that were affected by customer service issues (up to £15 million) and the remainder will go to charity.

OFGEM found that Scottish Power failed to treat its customers fairly; it had insufficient contingency plans and it did not do enough to protect its customers from issues that arose from the implementation of the new IT system. 

This resulted in a significant increase in the number of complaints the supplier received. Scottish Power also handled some of these complaints poorly with a significant number taking too long to resolve.

Many customers experienced unacceptably long call waiting times with many calling multiple times and hanging up before getting through.

Thousands of Ombudsman rulings were not implemented within the required 28 days and Scottish Power’s failures also resulted in more than 300,000 customers receiving late final bills. This meant some customers did not promptly receive money they were owed.

Dermot Nolan, Chief Executive of OFGEM, said: “Scottish Power let its customers down during the implementation of a new IT system.

“When things went wrong, 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.”

Big Six logo montageJuliet Davenport, Chief Executive of Good Energy, an independent rival energy supplier to Scottish Power and other similar-sized providers, was quick to attack the Big Six.

Pointing out that Good Energy are the only energy company to score more than 81% over the last five years in an annual energy company customer satisfaction survey conducted by a well known consumer organisation, Davenport said:

“The Big Six energy companies have been taking advantage of loyal customers for far too long. There are better deals and higher levels of quality service to be found elsewhere.

“Independent suppliers tend to focus on better service and fairer pricing because they have to work harder to win customers from the bigger firms.”

Since OFGEM opened the investigation, Scottish Power has improved its customer service. The average call waiting time, rate of abandoned calls and the number of Ombudsman cases have all more than halved. The number of late bills has fallen by 75%.

Pixie Energy

Pixie logo Pixie Energy is an incubator and a facilitator of strategic research and project work, focusing on energy regulation, policy and markets at the local and national level. Find out more about Pixie Energy here.

Local Energy Matters: Scotland

Local Energy Matters: Scotland is a free-to-download brochure with a focus on energy tariffs in the two Scottish electricity distribution regions, as well news on local energy and low-carbon schemes.

Previous editions can be download here.

Scottish energy market overview

You can read an overview of the Scottish energy market here.

Scottish Government energy feed