ENERGY supplier nPower has been warned it may be banned from conducting telesales marketing unless the company’s billing problems are addressed.
In the first of a series of tough new measures against the “big six” energy firms, regulator Ofgem will use new powers for the first time to force nPower to halt all telesales if it does not address issues about billing by the end of August.
Consumer groups welcomed the move yesterday.
NPower has come under fire after delays in billing left former customers – who believed they were up to date with their payment – facing hundreds of pounds worth of bills.
In December, following action from Ofgem, nPower’s chief executive Paul Massara apologised to all of the company’s customers and made a payment of £1 million to good causes and a commitment that no customer would be left out of pocket as a result of billing failures.
“NPower are consistently the worst for consumer satisfaction and this week topped the list for customer complaints, so Ofgem is right to take tough action,” said Which? executive director, Richard Lloyd.
“It is completely unacceptable for energy companies to neglect the basics of customer service. If they are unable to look after their existing customers then clearly they have no right to new ones.”
The parallel investigation into nPower’s customer service failings is the first case to be opened under Ofgem’s new Standards of Conduct and could lead to a financial penalty or redress payment if they are found to have broken rules.
“We’ve already won some concessions from nPower over abominable billing practices,” said Martin Lewis, founder of MoneySavingExpert.com. “But this is nowhere near enough. So it is with relief we hear that Ofgem is taking up the cudgels to get this company in line.”
Ofgem said there had been some progress since the regulator’s intervention in December – when nPower was fined £1m and banned for doorstep selling.
The regulator said longstanding problems in relation to new customers and the set-up of direct debit payments at nPower, which has consistently topped the tables for poor customer service, have now been tackled – and many of the oldest cases of late billing have been cleared.
Sarah Harrison, Ofgem’s senior partner in charge of enforcement, said: “NPower customers have suffered service failures for too long, that’s why Ofgem has secured binding commitments from nPower to reduce its bill backlog or face curbs on sales, alongside launching a wider investigation under Ofgem’s new Standards of Conduct.
“Ofgem has been monitoring nPower’s service closely and we have been increasingly concerned about the slow progress to tackle failings. NPower’s recovery plan has not delivered as far and fast as is necessary. Our analysis of complaints data also raises some serious concerns.”
NPower received 1.4 million complaints in 2013 after introducing a new billing system..