Scottish Power to pay £1.5 million for overcharging 1,700 customers 

Scottish Power’s direct debit customers to get £300 in refunds and compensation after paying more than they should during the energy crisis.

The energy firm mistakenly charged nearly 1,700 direct debit customers a higher rate between 2015 and 2023 that should only have applied to those who pay by standard credit, or on receiving a bill.

The average amount Scottish Power overcharged during this period was £149 per customer.

The energy regulator Ofgem said Scottish Power is paying a total of £250,000 in direct refunds to affected customers as well as another £250,000 in goodwill compensation payments, paying out an average of £294 per customer.

All payments will be made automatically, and customers do not need to do anything. Our energy rights guide tells you when else you might be eligible for compensation from your energy supplier.

Scottish Power to pay £1 million to help vulnerable customers

Ofgem said Scottish Power reported itself to the regulator last summer, when it discovered that operational errors had led to the mistake.

Scottish Power has also agreed to pay £1 million to Ofgem’s Energy Industry Voluntary Redress Fund, which benefits charities and community projects that help vulnerable customers with energy-related support.

Last year energy companies paid more than £72 million in customer refunds, compensation and Energy Redress Fund contributions.

Dan Norton, Ofgem’s deputy director for price protection, said: ‘The last few years have been challenging enough for energy customers facing increasing cost-of-living pressures, without the additional hardship of being overcharged. The price cap is there to protect consumers, and we take seriously any breaches of the safeguards we have put in place.

‘Suppliers must be vigilant and act quickly to resolve billing errors that impact customers. We will continue to closely monitor all suppliers and will hold them to account if they do not meet the standards we set.’

Ofgem’s Energy Redress Fund is run by the Energy Saving Trust who deliver money collected from companies in breach of licence conditions to appropriate charities, trusts, organisations, or consumers.

Compensation package agreed with Ofgem

Scottish Power said it has put additional controls and monitoring in place to reduce the risk of anything similar happening in future.

Andrew Ward, chief executive of Scottish Power’s customer business, said: ‘We’re so sorry that a very small number of our customers were affected by this mistake and faced an increased financial burden – especially during a time when energy prices were reaching an unprecedented high and the Government had to step in to provide support.

‘Looking after our customers is at the heart of everything we do and our immediate notification to the regulator, swift corrective action and the compensation package agreed with Ofgem show both how seriously we take this matter and our commitment to making it right.’

Which? director of policy and advocacy Rocio Concha said: ‘With many households still struggling to afford their energy bills and the price cap significantly higher than it was before the energy crisis, suppliers need to ensure that billing is accurate and that customers are easily able to get in touch with customer service if something goes wrong.

‘While many consumers will rightly consider switching, Scottish Power must urgently make improvements to ensure all customers are getting the service and support they need and deserve.’