Spark Energy to pay £250,000 to Citizens Advice following Ofgem investigation
Firm to pay redress to charity for ‘serious breaches’ which occurred when it was starting up.
Energy company Spark Energy has been ordered to pay £250,000 to Citizens Advice after an investigation by regulator Ofgem found the firm failed to treat customers properly while establishing itself in the marketplace.
The regulator said that, between June 2010 and October 2013, Spark Energy wrongly blocked customers from switching to other suppliers and was also guilty of transferring customers to other suppliers without consent to stop them building up more debt.
In addition the firm also failed to bill customers correctly and fell short on complaints handling standards.
Ofgem says Spark has since made progress and resolved these issues, but as a result of the "seriousness of the breaches" would have to pay £250,000 in redress to Citizens Advice to provide help to energy customers.
The fine will be split equally between Citizens Advice Scotland and Citizens Advice in England and Wales.
Sarah Harrison, senior partner in charge of enforcement at Ofgem, said: “The fact that Spark’s problems occurred when it was establishing itself in the market is no excuse for not complying with its obligations.”
Ofgem first opened the investigation into Spark Energy in June 2013 following concerns about the high number of complaints about the firm that it received from several sources.
This included a referral from Consumer Futures (previously Consumer Focus) in May 2013, which reported complaints about customer transfers, billings and refunds.
What Spark Energy says
Spark Energy apologised for its failings and said it has learned “valuable lessons” from Ofgem’s investigation.
A spokesman added: “There has been a wholesale restructuring of the business and an overhaul of key personnel, including the appointment of a new CEO, a new director of compliance, a new head of legal and a new head of customer service.
“We’ve also invested £2.5 million to double our customer care team from 60 to 120, overhaul training and introduce state-of-the-art IT systems.
“In the final quarter of 2014, more than nine out of 10 customer complaints were handled within 24 hours, a massive improvement on the second quarter of 2013 figure of under 30%.”
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