Wednesday, 4 March 2015

ScottishPower hit with sales ban over poor customer service

The energy regulator Ofgem has imposed a sales ban on ScottishPower, preventing it from proactively pursuing any new business for a period of twelve days.

The ban follows criticism from the regulator over ScottishPower's poor performance in a number of key areas. In November last year Ofgem issued a notice requiring the company to reduce call waiting times, promptly repay in-credit balances and act to immediately implement all decisions by the Ombudsman. Ofgem set a final deadline for compliance by the end of January, at the latest.

The ScottishPower Chief Executive, Neil Clitheroe, apologised to customers at the time, saying he would provide his "... personal assurance that we will do what we can to correct every problem, pay appropriate compensation and ensure that no customer is disadvantaged."

Ofgem had promised to take decisive action against the company if it failed to act appropriately, saying "Each month ScottishPower will publish its progress towards these commitments on its website. If it misses any of its targets its proactive sales activities will instantly be suspended." ScottishPower, which has around 5.2 million customers, had until the end of January to comply with all the Ofgem instructions and resolve the problems, which it blamed on the introduction of a new billing system.

Ofgem dithering

But it then took Ofgem more than a month to determine whether ScottishPower had complied with the requirements. In the meantime, ScottishPower had introduced a new energy tariff and was still selling to new customers whilst not resolving the outstanding issues.

Today's decision is based on the company not clearing the backlog of cases where the energy Ombudsman has made a decision but the company has not acted. More than 2500 such cases were identified and closed during November. The regulator took action because 30 cases had been incorrectly closed, where work was still required by ScottishPower to resolve outstanding issues.

Two minutes or five minutes?

While Ofgem says that the two minute call waiting target has been met, ScottishPower's own website said yesterday that call waiting times are five minutes. And although overdue bills have been reduced, many thousands of people are still waiting for refunds from closed energy accounts and overpayments.

Responding to the Ofgem announcement, ScottishPower's chief executive of retail, Neil Clitheroe, said in a statement "We are all fully committed to delivering continued service improvements, return to the high service standards long associated with ScottishPower and ensure that our customers realise the very real benefits of our IT system investment."

Gillian Guy, chief executive of Citizens Advice, said: "Customers of Scottish Power are still waiting for them to clean up their act. The poor service provided to many consumers with billing issues has turned initial errors into ongoing misery. The sales ban from regulator must now spur Scottish Power into action to ensure a corner is turned.

Is 12 days enough?

Asked whether she believed 12 days would be enough to resolve the company's poor customer service, Sarah Harrison, Ofgem's senior partner in charge of enforcement, told me: "We're investigating ScottishPower for poor customer service. We will be conducting an independent audit. The investigation continues. "

What ScottishPower had to do

Publish weekly progress reports detailing call waiting times - target of 2 minutes call waiting time. From end of November 2014. Ofgem says "Yes" but ScottishPower website says (on 3 March) the current average call waiting time is still 5 minutes.
Act on all Ombudsman decisions.End of November 2014.No - Today's sales ban was because of this.
Reduce overdue bills (those where refunds are due) from 75,000 to 30,000.End of December 2014.Yes.

by Marcus Williamson