OFGEM SSE to pay £1m after inaccurate annual statements (6124Q)
07 June 2018 - 4:14PM
UK Regulatory
TIDMSSE
RNS Number : 6124Q
OFGEM
07 June 2018
Thursday 7 June 2018
SSE to pay GBP1 million after issuing inaccurate and misleading
annual statements to pre-payment meter customers between
2014/15
SSE has agreed to pay GBP1 million to Ofgem's consumer redress
fund after providing some pre-payment meter (PPM) customers with
inaccurate and misleading information in annual statements.(1)
Ofgem launched an investigation into the supplier in November
last year after SSE reported the issue to the regulator.
The investigation found that, between June 2014 and September
2015, the supplier sent out 1.15 million such annual statements to
580,000 pre-payment meter customers.
Due to an IT coding error, these annual statements had
inaccurate information on the alternative cheaper tariff available
to customers and inaccurate estimates of how much they could save
annually by switching to them.
Some statements also overestimated the annual savings the
customers could make by changing their pre-payment meter to a
standard credit meter paying by direct debit, as well as by moving
to paperless billing.
Our investigation found that, whilst a large number of incorrect
annual statements were issued to customers, the level of harm is
low as only a small proportion of those customers would have acted
on the information by switching. The average saving for each of
these customers would also have been low.
The investigation found that SSE failed to act promptly to put
things right, by not identifying the issue at an early stage and by
not escalating action to address it or putting in place appropriate
remedial actions.
The supplier also failed to put in place arrangements and
processes around customer communications that were complete,
thorough and fit for purpose.(2)
SSE has since improved its processes to prevent this from
happening again. This includes carrying out extra checks on their
customer communications before issuing them and giving more
resources to the teams involved.
Ofgem has now closed this case without taking formal enforcement
action, taking into account the steps that SSE has since taken to
address its failings and, considering the low level of harm
identified, the redress it has agreed to pay.
SSE will pay GBP1 million into Ofgem's consumer redress fund
administered by the Energy Savings Trust, which supports consumers
in vulnerable situations and the development of innovative products
or services not currently available to energy consumers.(3)
Notes to editors
1. Ofgem's licence conditions require suppliers to provide
customers with tariff information on annual statements. The
information that must be provided includes the tariff customers are
on, details of their annual spend and how much they can save by
switching to the supplier's alternative cheapest tariff, if they
are not already on it. This gives customers the information they
need to manage their account, and helps prompt them to switch
supplier for a better deal. Suppliers are also required to take all
reasonable steps to provide information that is complete, accurate
and not misleading.
2. More information about Ofgem's decision is here and more
information about the investigation can be found here.
3. More information about Ofgem's voluntary redress fund can be
found here.
For media queries contact Ofgem media manager Michelle Amos 0207
901 1881/ 07766 511 470 michelle.amos@ofgem.gov.uk
For investor queries contact Ofgem head of investor relations
Martin Young 0207 901 7114 martin.young2@ofgem.gov.uk
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END
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