Ofgem has warned Npower it must meet monthly targets to reduce late bills or else be forced to ditch telesales marketing.
Ofgem has ordered Npower to put right its billing faults, warning that if it fails to improve the watchdog may force Npower to cease all of its proactive telesales operations.
This ban would include calls to current single fuel Npower customers to encourage them to sign up for a dual-fuel deal.
Further action to investigate Npower’s “customer service failings” is also being taken under Ofgem’s new Standards of Conduct, and this parallel inquest could lead to a financial penalty or redress payments if it is found that Npower has violated rules.
The action is being taken to resolve “major billing issues,” which include outstanding late invoices for customers’ energy supplies. According to its own website, 70% of customer complaints to Npower are down to issues with billing, while a further 10% come from payment problems.
Npower must meet an agreed standard by the end of August 2014 or face the consequences.
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Customers have suffered ‘for too long”
Sarah Harrison, head of enforcement for Ofgem, said that Npower customers had suffered bad service for too long and that Ofgem has grown increasingly concerned while monitoring Npower’s reaction to its problems and complaints.
In December 2013, Npower made a goodwill gesture of a £1 million payment to vulnerable customers and CEO Paul Massara apologised to all of its customers. It also made a promise that no customer would be left out of pocket as a result of billing failures, but Ofgem isn’t satisfied that Npower is keeping its word.
[SPOTLIGHT]Mr Massara stated that Npower was “committed to getting things right for our customers” but admitted there was a long way to go, as the current billing standards have "fallen short".
Commitments from Npower
By the end of June, Npower should have reduced its outstanding late invoices to 350,000, with that number dropping to 100,000 by the end of August. Its website will also provide monthly updates on its progress.
Npower will not bill any customer or former customer for energy consumption that occurred more than 12 months ago, as per the Backbilling code it is a signatory of.
Any customer who has received a bill from more than 12 months ago won’t be required to pay, and Npower will issue refunds to any customers that have already paid bills which demanded payment from over a year ago.
It won’t ask for any payment for energy used by anyone who left the supplier before December 2013 and still hasn’t received a final bill, so long as there wasn’t previous debt that the customer had already been told about.
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Complaints
Npower received 8,303 complaints per 100,000 customers between January and March 2014, an increase from the last quarter of 2013, and resolved 86.12% of these within one working day, down from 90.37% in the previous quarter.
In 2013, Npower received a total of almost 1.4 million complaints. That's around one for every four customers.
Due to the high level of complaints that it receives, Npower has also been set the target of reducing its overall level of complaints, and must work on increasing the number of complaints that are resolved within one working day.
If you are one of Npower's dissatisfied customers, the good news is that you'll be able to switch energy suppliers within three days by the end of the year.
What do you think of the punishments? Is Ofgem going far enough? Let us know your thoughts in the comments box below.
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