ScottishPower faces huge fine

ScottishPower could be fined tens of millions of pounds if it is found guilty of overcharging customers who pay their bills on a quarterly basis rather than by direct debit.

An investigation has been launched by regulator Ofgem into whether the 100 extra charged by ScottishPower to "standard credit" customers, compared with those whose payments are automatically taken from their bank account, breaks regulations introduced three years ago.

These rules require the difference to be "reflective" of the extra cost involved in processing and collecting quarterly payments, which the regulator has estimated should be about 40.

If found guilty, the firm could be fined up to 10 per cent of its turnover; for its retail and wholesale business alone, that came to 474 million last year.

ScottishPower said: "We believe that our pricing is cost-reflective and in accordance with Ofgem's guidelines, but we will of course co-operate fully with Ofgem in the investigation and in reviewing their concerns."