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Energy Firms Need to Restore Consumer Confidence

By Katie Anderson on November 2, 2011

Industry regulator Ofgem is urging energy providers to restore consumer faith in the badly tarnished energy market, just as they have handed out a £2 million fine to a leading energy company for the mishandling of complaints.

The fine was awarded to Npower shortly after Ofgem announced that it would do everything in its power to ensure a fairer, more competitive energy market in the UK – and just days after the regulator published details of suppliers’ profit margins.

Ofgem claimed that Npower was guilty of failing to record complaints properly, adding that the supplier had neglected to advise dissatisfied customers of remedies available through the Energy Ombudsman.

After being fined £2 million by Ofgem, Npower was surprisingly candid in admitting its failings. A spokesperson for the firm said: “We are very sorry. We let our high standards slip on this occasion. A small number of processes were not correctly adhered to – we have zero tolerance for this type of issue and we’ll continue to work hard to make sure our customers are put first”.

Npower is not the first energy supplier to have been fined by Ofgem this year. In July, British Gas was fined £2.5 million for mishandling customer complaints, an offence for which EDF Energy is currently being investigated.

Ofgem’s Sarah Harrison noted: “Energy suppliers now have a golden opportunity to convince consumers that they can be trusted, by getting behind Ofgem’s sweeping reforms for the retail market. This is the quickest way of restoring consumer trust in an industry badly tarnished by poor supplier behaviour”.

Adam Scorer, of Consumer Focus, added: “It is welcome to see Ofgem willing to hammer home the point that unless energy companies start treating consumers fairly there will be a price to pay. The energy industry is one of the least trusted by consumers and people need to see real changes to customer service if this trust is to be rebuilt”.

Households can take control of their energy bills to a certain extent by switching to the most affordable tariff and improving the energy efficiency of homes by installing double glazing, cavity wall insulation and newer, more energy efficient boilers. Savings can also be made by using electricity generated by solar PV panels throughout the home.