npower has been told it must resolve all outstanding billing problems or cease its telesales activities altogether, in an ultimatum issued by regulator Ofcom.
The energy firm has topped the Which? tables yet again for poor customer service, and has received constant criticism over the way in which it handles the billing of both existing and former customers. After it was revealed last week that npower has yet to resolve billing problems reported by customers six months ago, Ofcom waded in, telling the firm it must resolve all complaints by the end of August 2014, or cease selling its services to new customers.
The consumer watchdog group Which? revealed a new report recently that said 1.7m complaints had been made to the Big Six energy companies in just the first three months of 2014. nPower in particular received 83 complaints for every 1000, taking the lead in a poorly managed market.
npower admitted that late billing was an ongoing problem and that it affected 280,000 customers holding 400,000 accounts.
Responding to the Ofcom enforcements, chief executive Paul Massara said: “We are happy to provide the assurances agreed with Ofgem, with whom we share the same objective of getting out customer service to where it needs to be.”
Energy expert Tom Lyon from price comparison site uSwitch.com reported that billing happens to be one of the biggest reasons why customers complain. Just last year, one fifth of households were billed incorrectly by energy provides and companies are said to be taking ‘longer than ever’ to resolve mistakes.
Ed Davey, the UK energy secretary, welcomed the pressure on npower to get its service and its billing systems in order. He said it was “unacceptable” that so many npower customers had not received the service they deserved and “fully supported” Ofcom’s decision.
“Our policy reforms are making it easier and quicker for people to switch energy suppliers, so all companies need to be doing more for their customers,” he said.
The industry regulator said it has been “monitoring npower’s service closely”, and had been increasingly concerned about its slow progress in addressing failings. Not only that – Ofcom said its analysis had also raised “serious concerns” regarding npower’s customer service practices, which would be thoroughly examined in a separate investigation.
If npower fails to have got its outdated billing system in order and resolve all complaints by the end of August, it will be forced to cease all telesales activity until problems had been cleared.
Additionally, npower will be subject to financial penalties or redress payments if it is found to have broken the rules regarding customer service practices.