LONDON (Parliament Politics Magazine) – For overcharging thousands of prepayment metre customers on default pricing over the course of three years, Shell has agreed to pay half a million pounds.
After realising it had delivered the incorrect prices to customers’ metres, the consumer department of the energy giant Shell Energy Retail, will refund and compensate 11,275 consumers.
It meant that, starting in January 2019, those consumers were frequently required to pay more than what was permitted by the regulator’s pricing cap.
Some of the nation’s poorest and most vulnerable households are among those that use prepayment metres and already pay a higher rate for their energy. Shell has agreed to pay £400,000 to Ofgem’s consumer redress fund and automatically refund overcharged customers the total of £106,000 and pay extra £30,970 as “goodwill payments” to the customers who were affected.
Total payment from the energy company will be £536,970. Customers could anticipate receiving average refunds of £9.40 each.
They were deeply sorry that mistakes updating their prepayment metre rates led to certain customers being overcharged for a while, a spokesperson for Shell Energy said. They had started taking action to address the problem as soon as they discovered it and self-reported it to Ofgem. The company promised to write to customers to let them know about the payments.
If Shell had not disclosed the mistake and taken action to fix it on its own, Ofgem said, the compensation amount would have been significantly greater. The regulator also took into account the additional financial strain the situation would have put on prepayment consumers, particularly when energy prices were running historically high.
Neil Lawrence, the director of retail for the regulatory body, stated Ofgem expected suppliers to abide by the terms of contracts they had with customers, notably ensuring they paid no more than the level of the price cap.
Households in Britain are already having a hard time keeping up with rising cost of living and energy bills, he continued. Overcharging by suppliers could cause additional, unnecessary stress and worry at a time when consumers across the UK were already facing many challenges.
The business has violated the price cap twice since it was implemented, and it was forced to make amends to 12,000 consumers in 2019 for overcharging them when it was still operating under the First Utility name. Shell acquired the company in 2018.
As Shell has done in this instance, Lawrence continued, Ofgem is always ready to work with suppliers who don’t necessarily comply with their obligations but who have self-reported and were determined to make things right. The redress funds from Shell will assist in providing help to disadvantaged consumers with their energy bills.
