Energy firm Bulb pays £1.8 million after overcharging customers and preventing switching
Energy supplier Bulb has paid out £1.76 million in refunds and compensation after overcharging customers, blocking switches and wrongly removing vulnerable customers from the Priority Services Register.
The firm has admitted to a series of failings in its IT and compliance processes over a period of three years.
As a result, thousands of customers were charged multiple times for their standing charge, the fixed daily charge you pay to cover the cost of being connected to the gas and electricity grid, while others were wrongly prevented from switching to Bulb.
Separately, tens of thousands of vulnerable customers were removed from the Priority Services Register – a free service that suppliers offer to help vulnerable customers.
Energy regulator Ofgem said that just under 62,000 customers were affected by these errors.
Bulb has paid out about £1.6 million in refunds and compensation, as well as paying £157,000 into a voluntary redress fund, used to help vulnerable energy customers.
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What went wrong?
Ofgem found that Bulb didn't follow its rules in three areas. These were:
- About 11,400 customers were wrongly charged multiple standing charges between December 2017 and June 2020. These customers were overcharged by £699,000 in total. Bulb has since paid this back to the affected customers as well as an extra £675,000 in goodwill payments.
- About 3,800 energy consumers were blocked from switching to Bulb between June 2017 and April 2020. This happened because the firm did not submit the correct information to the households' existing suppliers when processing their switch. A data error meant that Bulb did not register the fact that each of these households had more than one meter at their property. This meant the switches could not go ahead.
Bulb has since paid £155,500 to consumers affected by this error.
- About 46,500 vulnerable Bulb customers were wrongly removed from the Priority Services Register between March 2019 and January 2020. The register is a free service that offers vulnerable customers a range of help, including advance notice of planned power cuts and priority support if their supply is interrupted.
Bulb reported this mistake to Ofgem in February 2020 and has now compensated the 933 customers who were removed from the register and suffered a power outage, totalling £70,000.
Bulb has said it contacted customers affected by all of the issues above and offered refunds and compensation payments from June this year.
Finally, Bulb has paid £157,350 to the energy industry's voluntary redress fund, used to help vulnerable energy customers.
What does Ofgem say?
Ofgem chief executive Jonathan Brearley said: "Bulb overcharged some customers, and risked leaving vulnerable customers without access to essential network services, when it failed to comply with Ofgem's rules.
"Our rules are designed to protect consumers, and suppliers must make sure they have the processes in place to comply with them if they are going to give their customers good service.
"Bulb has since put things right with affected customers and put processes in place to make sure it can meet Ofgem's rules."
What does Bulb say?
A Bulb spokesperson said: "We recently fixed some issues which affected some of our members and potential members. At Bulb, we pride ourselves on the quality of our operations and technology, but we know there will always be ways we can keep improving.
"That's why we've strengthened the Bulb team, boosted training, and put in place even more rigorous checks and verification processes."