Customers urged to check bills as Scottish Power to pay out £1.5m for overcharging
Households have been urged to check their fuel bills in case they are being ripped off, as Scottish Power agreed to pay out £1.5 million for charging too much during the energy crisis.
The energy giant was found by Ofgem to have charged 1,699 of its customers more than the strict limits imposed under the regulator’s energy price cap, which applies across Britain.
Between 2015 and 2023, these direct debit customers were charged a higher rate which should only have applied to those who pay by standard credit, or on receiving a bill.
The average amount Scottish Power overcharged the affected customers during this period was £149 per customer. But they will now get their money back and gain an extra £100 each, on average, in compensation.
Ofgem said Scottish Power is paying a total of £250,000 in direct refunds to all the affected customers as well as another £250,000 in goodwill payments, equating to an average of £294 per customer.
Scottish Power has apologised to customers and also agreed to pay £1 million to an Ofgem fund which benefits charities and community projects that help vulnerable customers with energy-related support.
All the payments will be made automatically, and affected Scottish Power customers do not need to do anything to claim the money.
However, consumer charities said households across the UK should regularly check their bills to make sure they are paying the right amount.
Advice Direct Scotland said energy bill problems remain the single most common complaint. Hazel Knowles, energy lead for the charity, said Scottish Power’s breach of the rules “underlines the importance of checking your bills”.
She added: “It is vital that people look at what they are paying and keep a close eye on the energy market. Taking regular meter readings and checking the level of your direct debit are as important as ever. If you have a smart meter, make sure it’s working.”
Which? director of policy and advocacy Rocio Concha said energy companies must improve its customer service when it comes to complaints about bills.
“Suppliers need to ensure that billing is accurate and that customers are easily able to get in touch with customer service if something goes wrong,” said Ms Concha.
“While many consumers will rightly consider switching, Scottish Power must urgently make improvements to ensure all customers are getting the service and support they need and deserve.”
Ofgem said Scottish Power reported itself to the regulator last summer, when it discovered that operational errors had led to the mistake.
Dan Norton, Ofgem’s deputy director for price protection, said the cost of living crisis had been tough enough “without the additional hardship of being overcharged”.
He added: “Suppliers must be vigilant and act quickly to resolve billing errors that impact customers. We will continue to closely monitor all suppliers and will hold them to account if they do not meet the standards we set.”
Andrew Ward, Scottish Power’s chief executive of customer business, said: “We’re so sorry that a very small number of our customers were affected by this mistake and faced an increased financial burden – especially during a time when energy prices were reaching an unprecedented high and the Government had to step in to provide support.”
Mr Ward said the compensation package agreed with Ofgem showed “both how seriously we take this matter and our commitment to making it right”.
The UK Government is expected to announce a scheme for businesses to get free support in claiming up to £10,000 in compensation for secret broker fees hidden in their energy bills.
It follows stories by i highlighting the practice of energy broker fees being concealed within firms’ bills.
Meanwhile, Ofgem is considering bringing in a new “dynamic” price cap, which would set limits based on the time of day households use their energy.
