Npower Investigation Update

For those not familiar with this subject here is a brief background and update as to where we are now.

Briefly the 'sculpting' thread
(http://forums.moneysavingexpert.com/showthread.html?t=822299&page=73)
was started in early 2008 to assist those overcharged by npower by their manipulation of seasonal weighting from May 2007 to April 2008. npower denied any wrongdoing but made goodwill payments of £25 or so intitially to claimants. More pressure was exerted by MSE'rs over the ensuing months and these payouts were gradually increased to 3 figure, and in two cases I know of, four figure sums.

Meanwhile Ofgem, acting upon a complaint from Energywatch opened an investigation into the 'sculpting' issue. After almost a year long investigation their eagerly anticipated findings were published in February 2009.

Their conclusion was bitterly disappointing. It was hoped that npower would be compelled to reimburse the £100m or so that they had wrongfully obtained from their 2.2m customers. Recieve a fine and perhaps pay compensation.

Ofgem stated that their findings had discovered only 200,000 customers had been overcharged and that they had no power to enforce compensation. Further they had incompetently allowed themselves to be 'timed out' by not serving notice of investigation upon npower quickly enough. This meant they had lost their ability to fine npower.
Instead they 'negotiated' with npower and reached an unenforceable agreement for these customers to be compensated by £1.2m. an avge of £6.00 each. Pathetic.

Ofgem announced this as a major achievement and the newly formed Consumer Focus (which had swallowed up Energywatch) touted it as a success.

Outraged by this travesty I and others made formal complaints against Ofgem and further complained to Consumer Focus. As a result of pressure and providing Consumer Focus with the correct information Consumer Focus changed their opinion on Ofgems investigation and decided to conduct their own.

This was no mean feat as Consumer Focus was not set up for this sort of initiative and all credit to management and their staff for taking this brave decision. Unlike Ofgem, Consumer Focus have no regulatory or enforcement powers.

Matters appeared to go quiet but much work was going on in the background by MSE'rs and others. Consumer Focus were fed what information that could be useful to them plus revealing information obtained from Ofgem under the FOI act.

The matter was further kept alive by MPs raising questions in the House and last but not least The Times continued to run a series of articles, exposing the weakness of Ofgem and their investigation, the ever increasing implausability of npowers denial of wrongdoing and highlighting new claims as and when they arose. The most pleasing of these, for me, being the 79 year old lady who claimed her money back from npower.

Late last year Consumer Focus completed their investigation and concluded that it was probable that 2.2m npower customers had been overcharged an avge of around £50.00 each. This was published in The Times. npowers reaction was 'no comment as we haven't seen the report'.

Now Consumer Focus have the results of their investigation, what do they do with it? They have no legal powers and it is not in their remit to take court action on behalf of consumers.

I cannot make any comment on what has happened.

What I can say is that I am fairly sure there will be an article in The Times tomorrow.
Amongst other things it will feature the 2004/5 'sculpt'. Up until now this has been barely mentioned. It was part of my claim against npower but the centre of attention has always been on the much bigger 2007/8 issue.

This earlier 'sculpt' is much easier to prove as there is none of the 'we lowered our prices and raised our discounts' type of defence amongst others that npower put forward. In fact in 2004/5 not only did they overcharge for the high rate units they raised the price of them as well! They probably received at least £10m additional income for this scam.

To feature this previous wrongdoing serves to illustrate the premeditation of the later one and show npower for the deceitful company that they are.

Also because of the six year rule it will not be many months before claims for this 2004/5 sculpt cannot be heard in county courts. One such claimant has recently come to the 'sculpting' thread and is receiving assistance. I hope there are many more as a result of the publicity.

So tomorrow, "Read All About It!"

notbritishgas wrote: »

Well certainly brilliant news, there is light at the end of the tunnel and a few brown pants at npower!

There is light but as my euphoria has subsided since yesterday I am now going to turn the dimmer switch down a notch.

As far as I know negotiations are at a very early stage and I do not know what form of compensation is being discussed or what the starting figure for it may be. I hope C.F. are going in with a much larger figure than the £47 avge they came up with.

If I had not made my claim which was for the 2004/5 and 2007/8 periods then £47, though better than nothing, would be less than half the £105.00 those two claims totalled.

In addition there was the breach of contract and recalculation of my bills adding around £900.00 to the overcharged units.

It will be interesting to see how C.F. approach the issue and also whether they intend to bring the 2004/5 overcharge into the equation or not. They may not but use it as a bargaining tool. Who knows?

If npower agree a compensation package they are surely going to try to make it less than the £47 avge that C.F. have calculated.

In respect of the 2004 issue, it is now entering the 6 year cut off rule. After 1st March this year anyone making a claim will see the size of it reduce daily until it disappears completely on 30th September this year. In terms of money this is a much smaller claim compared to 2007 so there isn't much to play with unless the bill recalculation element is used.

I think it unlikely C.F. would use the recalculation part unless they really wanted to go for the jugular, but you never know.

My concern is that this good news from C.F. may cause claimants to sit back and see how negotiations go. The outcome of these is uncertain and they may fail. If that happens then a court case will be many months away and an older claim will have dissipated away to nothing.

To avoid this situation the example of Sofa Spud ( on the sculpting thread) would have to be followed. He is submitting a holding claim to the county court in order to stop the clock on the 2004 part of his claim.

Having said all that I am not knocking what has happened. It is a giant leap of progress from where we were. A bulk compensation package will undoubtedly mean winners and losers (sort of).

It is very early days and as things unfold clarity will emerge. I hope npower come to their senses and settle amicably and fairly. £100m or thereabouts is a huge amount and I would be disappointed if they chose the litigation route and tried to tie it up in the courts for years.

We shall see.

Footnote.

Using the price differential as applicable to my region (S.W.) after the Jan 08 price increase, £47.00 equates to approx. 1033kWh charged at the Primary rate which should have been charged at the secondary rate. Customers with a 2007/8 claim at around this amount may well prefer to sit back and wait. I would.

Not 100% sure (memory not too good now) but I am pretty sure Ofgem concluded that npower had overcharged customers on npowers Gas Guardian tariff and this overcharge only occurred between the months of May-October 2007. They were the ones that should have been automatically compensated.