Co-op Energy to compensate 260,000 customers for complaints handling and billing problems

Around 260,000 customers experienced problems following Co-op Energy's transition to a new IT system in March 2015, with many unable to log into their online accounts, leaving them unable to submit meter readings or check their bill. Bills were also delayed and direct debit updates stopped, while new customers experienced delays in transferring to the supplier.

Ofgem got involved after receiving a significant increase in the number of complaints about Co-op Energy, while Citizen's Advice also noted a rise in the volume of complaints it received about billing following the supplier's switch to its new IT system.

MoneySavingExpert.com understands around 80% of the 260,000 affected customers have already been compensated and Co-op Energy is now in the process of tracking down all remaining customers who are owed money.

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Am I due to receive compensation?

Of the £1.8 million that is being paid to affected customers in compensation, £1.6 million has already been paid out. Co-op Energy is currently in the process of contacting the remainder of affected customers (about 50,000 of them).

If you've been affected by the issues at Co-op Energy following the integration of its new IT system last March, but are yet to hear from the company, you should contact the business yourself at customerexperience@cooperativeenergy.coop.

The money that Co-op Energy is unable to return to customers will go to the charity StepChange to help energy consumers who are in financial difficulties.

How much compensation am I likely to get?

The average amount that affected customers will receive is £7, however payments will vary and are calculated based on a formula agreed with Ofgem.

Has Co-op Energy resolved its issues?

Ofgem says that, since its involvement, Co-op Energy has "worked well to restore customer service levels and provide compensation to those customers directly affected by the issues". It has also voluntarily withdrawn from marketing activities to help focus on improving its services to its existing customers.

The supplier has given assurances that adequate processes and systems are now in place to ensure it meets its obligations and that it will provide the level of service that its customers should expect to receive.

Nevertheless, other issues have been identified this year, with MoneySavingExpert.com revealing in May that some Co-op Energy customers had been billed £60 to switch to a different supplier, despite the fact that they were in the last 49 days of their contract and therefore should have been able to leave penalty-free.

What does Ofgem say?

Martin Crouch, Ofgem senior partner said: “While customers experienced unacceptable levels of service, Co-op Energy has done the right thing by taking responsibility for the situation and paying out compensation to those people affected.

“If trust is to be restored in the energy market suppliers must make amends to their customers when things go wrong. We want all suppliers to constantly ensure customers are treated fairly.”

What does Co-op say?

Ben Reid, CEO of Midcounties Co-operative, said: “We have apologised to those customers who were affected by the problems we experienced when we introduced a new IT system last year. The system issues are now resolved and we have made significant improvements to our service.”