1st March 2010
Npower has been threatened with legal action after it emerged
that two million of its customers were overcharged.
In a recent study, Consumer Focus found that npower had
overcharged 2.2m gas customers by £100m - or an average of £47 per
household - between 2007 and 2008. Details of the investigation
were passed on to David Kidney, the Energy Minister, pressuring
npower into action.
The energy giant opened talks with the watchdog about customer
compensation but Consumer Focus have taken legal advice and are
prepared to launch a court case if npower's compensation offer is
unsatisfactory.
A spokeswoman for the watchdog said: "The Consumer Focus board
has this week signalled that we would support consumers through
legal action if the discussions founder."
npower had overcharged 2.2m gas customers
by £100m - or an average of £47 per household
Customers were overcharged when their two-tier tariff charged
them at the higher rate for the first 6,357 units of energy used
rather than the contractual maximum of 4,572 units. As a result,
the average customer was about £47 worse off.
Consumer Focus said under the conditions of npower's gas supply
licence, the supplier is required to notify customers of any
changed that make them "significantly worse off" and give them the
chance to switch if they are unhappy with the new terms. However,
in May 2007 npower failed to inform its customers of the
change.
It has also emerged that customers could stand in line for more
compensation after an investigation by The Times newspaper
uncovered evidence that the overcharging may go back even
farther.
One reader alleges that npower also failed to notify customers
of a similar change in 2004-05 and he was subsequently overcharged
by £12.84. If this is applicable to all 2m customers then the
overcharging would amount to £25.6m.
The Times has passed on details of the reader's claims to
Consumer Focus, Mr. Kidney and to npower.
A spokesman for npower said: "When we moved in 2003 from making
a standing charge to a two-tier tariff for our gas customers, our
terms included the ability to make seasonal adjustments to the
higher rate tariff.
"We are having discussions with Consumer Focus and we hope they
will come to a satisfactory conclusion."
Useful links:
How to get compensation
for energy overcharging
Claims Financial
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