MSE News: Npower to pay £70m in refunds after billing blunder

edited 1 October 2010 at 1:48AM in Energy
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  • edited 1 October 2010 at 12:40PM
    meggsymeggsy Forumite
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    edited 1 October 2010 at 12:40PM
    I do not find Cardews point unfair. From this end of the keyboard there appeared to be little in the way of input from MSE office. I personally sent email requests for support and these were not responded to. If behind the scenes work was going on then this should have been made clear. As far as I remember this issue was included in only one weekly email in over 2 years it has been running.

    Nevertheless this Forum has been an invaluable vehicle in bringing this issue to its conclusion and for that I am grateful.

    The pity is that there are so many issues for MSE to get involved in that prioritising is difficult. Naturally I feel that this should have been highlighted more but we can't all be winners.

    I agree with the above DD, emails were sent and requests for Martin to be involved were included in the gas sculpting thread, but well done to you for all your work on this, The Times, Consumer Focus and all on the famous sculpting thread :T
  • davidgmmafandavidgmmafan Forumite
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    On balance I side with MSE, they are not a charitable organisation and if the forum contributed in ANY WAY to this being resolved surely that must be a good thing? Besides I can't blame them for prioritising issues over others, everyone has to do this in thier life. Personally I'd say bank charges is much more important, as the sums (and impact) involved dwarf the sums being discussed here.

    Both are unfair, but I know which one I believe does more damage, and which one I regard as being nearer to theft... and it generates reveune of £2.6 BILLION per year.
    Mixed Martial Arts is the greatest sport known to mankind and anyone who says it is 'a bar room brawl' has never trained in it and has no idea what they are talking about.
  • CardewCardew Forumite
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    MSE_Martin wrote: »
    I find your later comment unfair. We did get involved in this - yet rather than doing it ourselves we worked with the official body set up for doing it - Consumer Focus and discussed, provided info, case studies on it - consumer focus has delivered.

    Yet I get increasingly frustrated by the "Martin & his team should've done this" we do not have an unlimited resource of time and team to deal with every issue.

    We are not a publically funded campaigns body. This was an important issue effecting a lot of people which was already being appropriately dealt with by a publically funded body.

    We were involved in discussions with CF who told us that it was being dealt with and would take time. What else you wanted us to do I don't know, but I'm certainly more than happy with what we did and don't believe that duplicating that work was the best focus of our campaigning resources.

    There were frequent requests for Martin or his team to get involved and as far as I am aware no mention of this was made in the various sculpting threads or the News letters.

    Your involvement with Consumer Focus was certainly not known by many(any?) on this forum, which I find rather surprising for a team that(understandably) are not shy when it comes to publicity;) An example is the credit you have claimed for stopping the practice of retrospective notices of price increases. Although in fact stopping that practice is largely an 'own goal' and actually will cost some people money.

    The whole point is that the Npower issue was raised long before Consumer Focus were involved and being dealt with(badly) by Ofgem and Energywatch and some intervention, or even comment, by MSE would have concentrated minds.
  • edited 1 October 2010 at 1:55PM
    CardewCardew Forumite
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    edited 1 October 2010 at 1:55PM
    Hi



    Most of our gas customers were better off after we made changes in 2007 but some changes were not easy to understand and we didn’t communicate them well. We’re sorry for the confusion and we're going to make some payments to put things right.


    Sally

    Sally,
    We appreciate you are just repeating the Npower 'defence' for their actions.

    However that defence was discredited which is the sole reason you are now paying back customers £70 million. That defence was challenged by those who took court action, and as far as I am aware was not upheld in a single case and you have paid substantial damages - mainly in out-of-court settlements.

    The simple fact is that you structured your charges over that period in 2007 to ensure that virtually every one of your gas customers paid for a great many more units at the Tier 1 price.

    Your first 'defence' was that NPower can redefine the length of a year from 365 days to whatever you think is appropriate(the infamous NPower 'tariff' year).

    Your second defence was to retrospectively claim that a general cut in gas prices(along with other companies) was intended as a form of compensation - and even got ofgem to go along with a £6 rebate to a fraction of your customers.

    You really should not be put in a position to come on MSE and present NPower's PR spin on a disgraceful episode.
  • An important principle has been established here.

    npower claim that the changes they made overall were of benefit to customers. However they agree that when the change to the Primary Block units (the higher of the two gas prices) is taken in isolation then they will reimburse customers who were charged for more than 4572kWh Primary Block units.

    What has received little publicity and does not appear to have been considered by Consumer Focus is that npower used exactly the same technique in 2004/5 to overcharge customers. In this instance there were no adjustments to DD discounts or a lowering of the gas price to cloud the issue. In fact npower changed the way they charged for the Primary Block units (to cause an overcharge) at the same time as introducing a price increase.

    On 1st October, 2004, npower introduced changes which meant, for example, that for the 12 month period 1/4/2004-31/3/2005 virtually all of their gas customers would have been overcharged. Not to the same extent as this recent case but nevertheless would have netted them around £20m to which they were not entitled. If any of you were with npower during this period then I would recommend, if you have been overcharged, calling the helpline mantioned above and requesting you be refunded. If they refuse, and they probably will, then the principle they have established should make any claim so much simpler than ever it was before.

    After all, npower now agree it is right to recompense where they have charged for more Primary block units than they were entitled to.

    Strike while the iron is hot.
    I would agree with this & would like to point out that any concerns over the 6 year time limit for claims I believe would not apply here.
    I have the letter they sent me anouncing the price rises on that very day. While it mentions the unit price increases, it does not give the detail of how these will be applied. As such it is an act of concealment which removes the time limit for anyone to make a claim against them.
  • MSE_Martin wrote: »
    I find your later comment unfair. We did get involved in this - yet rather than doing it ourselves we worked with the official body set up for doing it - Consumer Focus and discussed, provided info, case studies on it - consumer focus has delivered.

    Yet I get increasingly frustrated by the "Martin & his team should've done this" we do not have an unlimited resource of time and team to deal with every issue.

    We are not a publically funded campaigns body. This was an important issue effecting a lot of people which was already being appropriately dealt with by a publically funded body.

    We were involved in discussions with CF who told us that it was being dealt with and would take time. What else you wanted us to do I don't know, but I'm certainly more than happy with what we did and don't believe that duplicating that work was the best focus of our campaigning resources.

    As the 'johnny come lately' to that thread I only wish to say the following:
    When I came across this issue I found it surprising that MSE themselves were not more involved given the scale of the problem.
    Given that Archna started the thread & updated the first post in March 09 could you not have given a further update to show people they were not fighting alone?
    Even so, it is thanks to this board that I became aware of the issue and was able to take a bite (nibble?) out of npower thanks to all the help I received here.
  • alleycat` wrote: »
    What will be interesting from my point of view is they gave me a gesture of goodwill payment but said they had done nothing wrong - just that i was a great customer (or some other twaddle).

    I wonder if they'll now give me a refund as well?

    I'm not that interested in the money (as the gesture of goodwill was what they owed me anyway + a bit more) but in whether or not the gesture of goodwill was really ever that.

    Well done DD :T

    Ditto to all of this
    KE veteran - life seemed so much simpler then!
  • i have also moved house and changed gas and electricity supplier. I was with NPower but changed because one winter I was charged nearly £250, I switched to EDF and the next winter my gas bill came to £90 for the 3 months, the winter was colder too, I had the heating on more than I did when I was with NPower.

    I also think British Gas are rip off merchants, when i moved into my new house BG was the supplier but I wanted to change to EDF as I was happy with the prices of my bills. BG charged me over £200 for gas and electricity for about 3 weeks supply, I was apalled. When my bill for EDF came in, I was in credit and spent about £60 on gas and electric in 3 months, how can these people/companies get away with it. Dont they realise times are hard and to charge people for air, which I feel like they are doing, is ridiculous.

    I was an Npower customer from 2005 to 2008 so would I qualify to receive a refund? Would it be worth calling them?
  • Consumer Focus is on the list of quangoes to be considered for the chop. I don't know what its annual budget is, what it does and whether it's worth saving or merging.

    The question is, would nPower have refunded customers if there had been no Consumer Focus?

    I had not heard of DirectDebacle until reading this thread, but thanks DD for your efforts and MSE for hosting the discussion.
  • I was an Npower customer from 2005 to 2008 so would I qualify to receive a refund? Would it be worth calling them?

    As I understand it the mechanics of working out if a customer qualifies for a refund is this.

    It depends on the anniversary date (the date you joined npower) and the length of time you were with them.

    For example if a customer joined npower in December 2006 and left in October 2007 then npower will calculate how many of the Primary Block (high priced units) you were charged for over that period. If it exceeds 4572kwh then you will have been overcharged and qualify for a refund.

    The amount you will be refunded is the number of Primary Block units over 4572 * the difference in price between your two gas prices plus interest plus VAT.

    If IRC the highest overcharge occurred for customers who were with npower for the 12 months from March 2007 to Feb 2008 inclusive and used or exceeded the allocation of Primary Block units for each of those months. It is these customers who will receive the most, depending on the regional price for their gas it will exceed £100 for some.

    I also understand that npower will not be compensating those that they have already compensated. I know in many cases npower were offering 'goodwill' payments to those that complained of being overcharged. These 'goodwill' payments were typically around £25 initially. I do not know what npowers approach will be to those that accepted a 'goodwill' payment less than they were actually overcharged.

    My view is that they should pay the shortfall but I would recommend calling the helpline no. in the first instance.
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