Energy News

British Gas and Npower fined £4.5m for complaints

Thursday 12 January, 2012

By Martin Fagan

Ofgem insists the two energy giants pay the fines it imposed in 2011 for mishandling customer complaints.

Energy regulator Ofgem is insisting British Gas and Npower pay the fines it imposed on them in 2011.

In July last year, Ofgem fined British Gas £2.5million after an investigation by the regulator found the company had breached regulations setting standards for the way energy companies handle customer complaints. British Gas believed that Ofgem’s fine was “disproportionate” and appealed.

In October, the regulator announced it was fining Npower £2million for breaching the same regulations as British Gas. However, because of British Gas’ appeal to get the fine reduced, there was some confusion in the industry whether the two companies would withhold paying indefinitely.

The regulator has not only confirmed the fines will stand but also announced that both companies have until 22 February 2012 to pay their respective penalties or face further action.

In a survey of customer complaints published yesterday, consumer watchdog Which? revealed that British Gas had a customer satisfaction rating of 47% but Npower had the lowest customer satisfaction rate of 41%. The small niche energy provider Good Energy topped the table with a score of 84%.

“We want Ofgem to be given new powers by the government, so that it can demand detailed information about complaints from the energy companies,” said Which? energy expert Sylvia Baron.

“Making this data public will allow consumers to compare suppliers based on how many complaints they get, and how well they handled them.”

Although the fines imposed on British Gas and Npower are large by any normal measure, the £2.5million for British Gas represents a mere 0.02% of the company's 2010 turnover.

The largest fine Ofgem has imposed in recent years was £41.6million in February 2008 on National Grid Gas for abusing its dominant position in the market for provision of domestic gas meters. However, National Grid Gas took the fine to the Court of Appeal which reduced it to £15million.