Npower to pay £1m after customer complaints soar

Energy regulator Ofgem stepped in after becoming "increasingly concerned" about Npower's consumer complaint levels, which have shown a sharp increase in the last year.

Npower cases reaching the Energy Ombudsman have also trebled since last year, while Consumer Futures says Npower is getting about five times as many complaints as the least-complained-about major supplier. (Join our free Cheap Energy Club if you've had enough of your firm.)

The big six provider blames its issues on switching to a new computer system, which meant a number of bills and statements didn't go out when they should have done. Direct debits weren't set up properly, while there have been problems in setting up some customer accounts.

These issues meant more customers calling up with complaints – leaving call centres having trouble coping with demand.

I'm an Npower customer. What's being done?

Npower has taken on 800 extra staff and staff to address its billing issues, and has put a recovery plan into place. It will write to its customers to promise they will not lose out financially as a result of its problems.

It adds that any problems will be identified, and it'll write to customers to explain what's happened and what it's doing to put things right. Repayment periods, for example, are being extended for anyone who has been affected by payment problems.

Ofgem will also be regularly updated on service levels.

Where's the £1 million going?

Npower will make a £1 million payment to the Npower Health Through Warmth Scheme Crisis Fund, which supports customers of all energy companies with cold-related illnesses who need heating repairs and installations that they cannot afford themselves.

Half of that money will go to Macmillan Cancer Support, to it help it support people affected by cancer and fuel poverty.

Growth in complaints is 'unacceptable'

Ofgem senior partner Sarah Harrison says: "Many Npower customers will have noticed a serious deterioration in service levels over the last year. The huge growth in complaints about Npower is wholly unacceptable and is an issue that Ofgem takes very seriously and is why we intervened in this case. "We are pleased to see Npower's leadership team focusing on this issue, acknowledging the scale of the problem and sharing with customers its action plan to put things right. Npower's commitment that its customers will not lose out financially as a direct result of the company's billing system problems is important and we will expect Npower to do all it can to identify and rectify such cases. We also welcome Npower's £1m payment to benefit vulnerable consumers."

Npower's chief executive, Paul Massara, says: "In recent months, we've let many of our domestic customers down and I wanted to write to each of them personally to say sorry. We have been in discussions with Ofgem and are working on this as our top priority.

"Although we've made good progress fixing many of the underlying issues, we still have a long way to go, and our customers deserve to get the best possible service. That is my commitment."