British Gas hits out at £2.5m Ofgem fine

Energy supplier claims punishment for mishandling customer complaints is ‘disproportionate’ British Gas believes that its regulator is disproportionate in finding the company in breach of regulations relating to customer complaints. The energy company has been fined £2.5m by Ofgem for failing to deal properly with customer complaints. The fine follows a year-long investigation into the company which found it breached regulations on how energy companies should handle disputes. Ofgem found: • British Gas failed to re-open complaints from customers who indicated they felt the matter was not resolved adequately. • It failed to provide sufficient information to complainants about the energy ombudsman service. • It failed to deal properly with complaints from micro-businesses because it had not implement the necessary processes and practices. Ofgem said the fine should be regarded as a warning that all energy companies must take complaint handling seriously and treat their customers fairly. Complaint handling by mpower and EDF Energy is currently under scrutiny by the watchdog. A spokeswoman for British Gas said the company accepted the criticism about its handling of micro-business compaints and actually took the initiative to notify the regulator about its failings in that area. But the company felt that finding it in breach of rules for failing to provide adequate information to consumers about the energy ombudsman was “disproportionate to the mistake”. The spokeswoman said that the company had failed to provide information about the ombudsman to a few customers making complaints, but added: “It didn’t prevent anyone getting the redress they needed.” In a statement, British Gas said: “At British Gas, we look after half the homes in Britain and we take great pride in our customer service. Recently, Consumer Focus awarded British Gas the top four-star rating for complaint handling and we’ve won European call centre of the year for the last two years. Therefore Ofgem’s finding us in breach on a minor point when we have 16m accounts, is, we feel, totally disproportionate to the issue. “However, specifically for our micro-business customers, we acknowledge our service fell short of what they should expect from British Gas, for which we apologise. We knew we had an issue here which is why we flagged it to Ofgem. After a £4m investment, we are now confident we meet all of our regulatory requirements”. Ofgem is also investigating Scottish Power, Scottish and Southern Energy, EDF Energy and npower for misselling and is carrying out two investigations into Scottish Power for potentially misleading marketing and the difference between its standard credit and direct debit tariffs. Sarah Harrison, Ofgem’s senior partner for sustainable development, said: “We warned the industry in March that we would be backing up our plans to reform the retail market with a tough approach to enforcement. This £2.5m fine against British Gas, and the other £10m of fines imposed on the energy industry so far this year, sends a clear message to energy companies that they must abide by the rules.” Audrey Gallacher, director of energy at watchdog Consumer Focus , welcomed the fine: “Frustrating the attempts of customers to get complaints sorted out is unacceptable. It adds to the lack of trust in energy companies and it denies British Gas important insight into customer service problems. “The importance a company gives to solving customer complaints is a good indication of how much they value their customers. British Gas deserve some credit for being open about its failures and taking action to put them right. But the experience of its customers when they make a complaint in the future will be the real test.” This is the second time this month British Gas has been fined by Ofgem. British Gas Business was penalised £1m after the regulator’s investigation found the company had misreported the amount of electricity supplied under the government’s renewables obligation. British Gas claims it spotted the problem – it said an over-reporting of the amount of renewable energy it was supplying caused by human error – and notified the regulator. Richard Lloyd of Which? said: “Suppliers should always tell customers that they can take an unresolved complaint to the energy ombudsman. It’s well worth people pursuing this as the majority of complaints assessed by the ombudsman are upheld, and seven in 10 include financial compensation. “Which? also wants the regulator to provide much clearer information about complaints in the energy industry so that everyone can see how customers are being treated. It says Ofgem should now follow the lead of the financial services industry and regularly publish data on complaints, broken down by each company.” Customers with a complaint must give their energy supplier a chance to solve the problem – within an eight-week deadline – before approaching the energy embudsman . Energy bills Consumer affairs Household bills Energy industry Gas Jill Insley guardian.co.uk

Posted by on July 27, 2011. Filed under News, Politics, World News. You can follow any responses to this entry through the RSS 2.0. You can skip to the end and leave a response. Pinging is currently not allowed.