Market regulator Ofgem has ordered energy giant Npower to submit monthly reports on its efforts to reduce late billing, and has warned the firm must improve or face curbs on its sales activities.
Ofgem has also announced that it has opened an investigation into Npower’s failures to deal with complaints raised six months ago.
Npower now has until August to resolve billing issues – which currently affect some 280,000 customers – or Ofgem will cease all its proactive telesales to new customers.
Meanwhile, the investigation into customer service failings could lead to financial penalties if Npower is found to have broken the rules.
“Npower customers have suffered service failures for too long”, said Sarah Harrison, the senior partner in charge of enforcement at Ofgem.
“Ofgem has been monitoring Npower’s service closely and we have been increasingly concerned about the slow progress to tackle failings,” she added.
“Npower’s recovery plan has not delivered as far and fast as is necessary. Our analysis of complaints data also raises some serious concerns which will be thoroughly examined in our investigation.”
It has recently been revealed that customers of Npower made more complaints than those of any other large energy company last year. The firm received 306 complaints per 100,000 customers in the final quarter of 2013, three times the number of ScottishPower, its second worst rated competitor.
Richard Lloyd, executive director of consumer watchdog Which? has therefore welcomed the move.
“It is completely unacceptable for energy companies to neglect the basics of customer service. If they are unable to look after their existing customers, then clearly they have no right to new ones,” he said.
The recent bad press for the ‘big six’ energy suppliers – including Npower – has at least been good news for smaller firms.
The renewable energy company Good Energy saw its customer base increase by 32% in 2013 as dissatisfied customers looked for alternatives.
Good Energy, and other green suppliers such as Ecotricity regularly score high marks in customer satisfaction.
In January, the annual Which? energy survey found that the two companies lead the way in customer satisfaction, as both achieved an overall customer score of 82%.
Complaints to ‘big six’ energy companies hit record high
Npower tops energy customer complaints table
‘Big Six’ energy firms admit to failing customers
Ofgem orders inquiry into energy market competition
Competition in energy market is improving, says trade body
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