UPDATE MARCH 09What's this about?
In April 2008, npower changed the way it bills gas customers and miscalculated. After a long drawn out process Ofgem has now ruled it must pay back the overcharge. If you were one of its customers (apart from those on prepay) at the time, you should be getting a refund.
This thread was originally started way before the Ofgem investigation and you can follow its progress.
The Ofgem statement was made on 13 Feb....
[FONT="]OFGEM COMPLETES INVESTIGATION INTO NPOWER TARIFF CHANGES[/FONT]
[FONT="]Ofgem has today (Friday) completed its investigation into Npower’s changes to its gas tariffs in 2007. Following the investigation, the company has agreed to put things right and will be making payments totalling £1.2 million to some 200,000 customers affected. [/FONT]
[FONT="]The regulator was concerned about Npower’s approach to notifying its customers of the changes which resulted in financial loss to some households whose consumption was low. A large number of consumers did benefit from the changes.[/FONT]
[FONT="]Npower has now pledged to write to existing and past customers adversely affected by the changes in the tariff, so no action by customers should be necessary. If customers still have queries in due course, they should call Npower on [/FONT][FONT="]0845 6026363[/FONT][FONT="]. [/FONT]
[FONT="]Following its energy probe last year Ofgem is considering a package of measures which are focused on improving the quality of information available to consumers.[/FONT]
What will happen?
npower will contact all customers affected by this problem within about four weeks and issue a refund to their bill. The refunds will, on average, be around £6 or £10 at the most. If you're no longer an npower customer you should receive a cheque in the post.Still not happy?
Many in the discussion below are contesting that the payout is not enough; after all the original estimate of payouts was £20-£30 and some people before Ofgem got involved had far bigger settlements in the small claims court.
If you agree, then there are still things you can do (as well as lobby together with others in this thread).
Back to the original post
- Complain again to npower. Write to npower and complain again. The Times has a template letter you can use.
- Lobby your MP. Get in touch with your local MP and put in a complaint. Find your local MP
_______________________________________________________________What's this about?
Last April, npower changed the way it bills customers and in doing so is being accused of overcharging. If you were one of its customers (apart from those on prepay) at the time, you may be in line for a rebate of around £20-£30.
Energywatch has put in a formal complaint to the regulator Ofgem, and the result of that is expected shortly (this post will be updated when it comes in)Why the ifs and buts
You will note a few 'ifs and buts' in this post, thats because the complexity of the charges is part of the problem... its simply a nightmare. Its because nPower changed its tariffs sturcture that this is so difficult to interpret as it depends on when and where the charging started.
We've consulted some of the comparison companies and below is the score to the best of their and our knowledge, but until Ofgem pronounces surety is tough to come by.What went wrong?
The price of gas has two different billing rates. The first chunk of KwHs (the unit of gas usage) is more expensive, then after you hit a threshold, each unit is then cheaper.
Yet it seems its possible nPower should've charged the higher rate on the first 4,572 kWhs, it charged it for the first 5,120 kWhs or more, leaving people overcharged by around 4p/unit for 548KwHs or more.
The issue was originally highlighted by Energywatch and referred to Ofgem for investigation. Ofgem is likely to respond to this in the next week or so.
Any updates will be here and a reminder will go in the free, weekly MoneySaving email
.Who does this apply to?
This appears to be a problem that affects npower customers from 2007 apart from pre-payment customers who only have one rate.
A rough rule of thumb to check if you could've been affected is:
If you pay more than £20 for gas per month, check your bills!
This is because a little more than that should be enough to have pushed you into the cheaper price band... so its worth checking.How to work it out
Step 1. Get a copy of last year's bills (from April 2007 to April 2008) and see how many kWh's you were charged in total over the year at the higher rate.
(If you were only a customer for part of the year, you'll need to work it our proportionately.)
2. If it's over 4,572, you could've been overcharged. A typical higher rate is charged at 6-7p/kWhs and a lower rate at around 2p. So for example if you've been billed 5,000 kWHs at the higher rate, it's arguably 428 kWhs too many and you'll be owed around £20.How to get your cash back
This isn't tried and tested, more try and see what happens. First call it up and see if it'll give you a refund.
If this doesn't work write a letter to npower explaining the miscalculation and see if it responds. If this doesn't work refer your complaint to Ofgem.
Though it is possible an easier system could be put in place by Ofgem itself after the complaint.Please report successes/failures belowALL UPDATES AS OFGEM INVESTIGATES WILL GO HERE. What have Ofgem & Energywatch said?Ofgem: "Regarding this issue we have written to npower seeking further information on their charging arrangements. They have until close of business this Wed (14 May) to reply. Following this we will evaluate the response to see what further action may be required."
Energywatch: "Energywatch views the issue with seriousness and felt the regulator should be aware of it."