Npower agrees to pay £3.5million to help vulnerable customers following Ofgem energy sales investigation

Press release

Publication date

  • Ofgem’s investigation found that npower breached energy sales rules on the doorstep and over the phone
  • npower has agreed to pay a £3.5 million package to help vulnerable consumers
  • npower has remedied all the issues raised.

Ofgem’s investigation found that npower had breached its marketing licence conditions. npower accepts this finding and has agreed to pay £3.5 million which will directly benefit vulnerable consumers.

Ofgem’s investigation centred on the sales processes and information used by npower when customers were making decisions about whether to switch supplies to npower.   

The decision reflects the fact that while npower was making changes to its sales processes, these fell short of the standards set by Ofgem’s tougher 2009 marketing rules. These shortcomings in npower’s processes have been fully remedied. All breaches ceased by September 2012.  

Ofgem’s Senior Partner in charge of enforcement Sarah Harrison said: “npower has done the right thing by stepping forward and recognising that, whilst it was making changes to improve its sales processes, weaknesses remained which affected consumers’ ability to compare supplier offers fairly.  These issues have been fully addressed by npower and Ofgem welcomes the company’s actions and its agreement to pay £3.5m to directly benefit vulnerable consumers.

“Ofgem will continue to hold companies to account to ensure rules to protect energy consumers are met and that the market works for consumers in a simpler, clearer and fairer way.”

-Ends-

Notes to Editors

  1. Summary of Breaches

The licence breaches relate to:

  • npower gaining insufficient information about a customer’s consumption to enable them to make informed decisions on whether to switch energy suppliers.  
  • npower’s processes failed to ensure that price comparisons between the price of npower’s supply and that of the customer’s current supplier were always based on the tariff that customers were on.
  • Information on when some consumers would receive their direct debit discount and how direct debit levels would be reviewed was also found to have been inaccurate.

This is important information required when companies are giving comparative sales quotes to help customers make fully informed decisions.    

  1. Penalty notice 

You can view the penalty notice via our website.  

You can view npower’s statement on their website. 

  1. £3.5 million package

npower will make a payment of at least £25 to each of its current customers who are a core group Warm Home Discount payment recipients. Current customers will receive a credit on their account or payment to top up a prepayment meter account. 

Any money which is not paid out from the £3.5m fund, whether due to un-cashed Warm Home Discount cheques or any other reasons, will be paid into the npower Health Through Warmth Crisis Fund. This provides financial help and support for vulnerable homeowners with long term cold related illnesses who need heating repairs and installations that they cannot afford themselves. Beneficiaries do not have to be npower customers to benefit from the scheme.