SSE to pay £1 million after issuing inaccurate and misleading annual statements to pre-payment meter customers between 2014/15
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SSE has agreed to pay £1 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 £1 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
- 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.
- For more information about Ofgem’s investigation, see: Decision to close the investigation into SSE and its compliance with its obligations under the gas and electricity supply licences (Standard Licence Conditions 31A and 25C)
- For more information about Ofgem’s voluntary redress fund, see: Ofgem appoints Energy Saving Trust to distribute payments from rule-breaking energy companies to charities
Further information
For media, contact:
Michelle Amos: 0207 901 1881
Media out of hours mobile: 07766 511470 (media calls only)
For investors, contact:
Martin Young: 0207 901 7114
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