Energy firm Scottish Power is sending £294 directly into customers’ accounts after admitting to an error in billing during the height of the energy crisis
Energy regulator Ofgem has announced an agreement it has reached with Scottish Power, which will pay out £1.5M in refunds and compensation to 1,699 customers, which averages £294 per customer.
It comes after Ofgem found that Scottish Power overcharged customers an average of £149 during the peak of the energy crisis due to a billing error for those on a certain payment method and has now been ordered to repay the money to customers with more on top.
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The mistake was that between 2015 and 2023, Ofgem mistakenly overcharged 1,699 Direct Debit customers a higher rate, which should only be payable by those who pay by standard credit (ie pay on receipt of a bill).
Ofgem said that the money back is being paid directly into customers’ accounts and that they ‘do not need to do anything’ to get it.
Ofgem said in its announcement: “As a result, ScottishPower has paid a total of £250,000 in direct refunds to affected customers, plus another £250,000 in goodwill payments – equating to an average of £294 per customer. All payments were made automatically, and customers do not need to do anything.
“ScottishPower has also agreed to pay £1 million to Ofgem’s Energy Industry Voluntary Redress Fund, which benefits charities and community projects that help vulnerable customers with energy-related support.
Dan Norton, Ofgem’s Deputy Director for Price Protection, said: “The last few years have been challenging enough for energy customers facing increasing cost of living pressures, without the additional hardship of being overcharged. The price cap is there to protect consumers, and we take seriously any breaches of the safeguards we have put in place.
“Suppliers must be vigilant and act quickly to resolve billing errors that impact customers. We will continue to closely monitors all suppliers and will hold them to account if they do not meet the standards we set.”
ScottishPower reported itself to the regulator last summer, when it discovered that operational errors had led to direct debit customers being charged the standard credit tariff.”
Ofgem added that the money Scottish Power would have to pay would have been “considerably higher” but for the fact that Scottis Power identified and self-reported the issue.
The firm reported it to Ofgem in summer 2023, citing ‘operational errors’ which led to the mistake.
The overcharge began in 2015 and affected 11 price cap periods up to June 2023, when energy prices hit all time highs.
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