NPower gas 'sculpting'

Terrylw1

Spot on DirectDebacle!

Whilst the money is been handed back...lets not forget thats £70m extra used for investment to grow the business. Lots of extra interest gained from that.

Ofgem have always been an absolute waste of space. Customers are seeing this now given unpopular moves such as price increases however Ofgem have done very little over the years to ever protect the consumer. How long did it take for them to even consider dodgy sales agents?

They are a limp wristed organisation and I wonder what would change if they were not there.

This industry has other regulatory bodies as well and they are also pretty poor.

It seems you can get away with most things in this industry and only public opinion attempts to improve it.

The sad thing is, you know Ofgem are worthless, but so do these companies. So, expect more of the same.

Sterling

DirectDebacle wrote: »

It is a common mis-conception that Ofgem have the power to compel energy companies to make compensation payments. They don't.

However, if as you go on to say, Ofgem has “the power to fine a company up to 10% of its turnover”, then potentially Ofgem had the power to fine Npower a great deal more than the amount that Npower had wrongly extracted from its customers. That in turn would have given Ofgem the leverage to warn Npower that unless it paid back its customers in full, Ofgem would fine Npower a considerably larger sum.

In other words, back in March 2008 Ofgem was well placed to conduct a proper investigation of the Energywatch complaint regarding Npower’s wrongdoings, and if it upheld the complaint, it had the leverage to make Npower pay everything back to its affected customers.

What actually happened, as you yourself discovered, was that Ofgem sat on the Energywatch complaint for almost two months. This delay was fatal to Ofgem’s power to impose a fine on Npower. The statutory time limit is 12 months from the date of the action complained of. In this case the first action by Npower mentioned in the Energywatch complaint occurred on 1st May 2007. Ofgem received the Energywatch complaint on 7th March 2008, i.e. only ten months after the alleged wrongdoing.

Consequently, Ofgem had almost two months to commence its investigation before running out of time. Furthermore, the same regulations provide a “stop the clock” mechanism whereby once the investigation is commenced, the calculation of time running under the said time limit ceases to run, and none of Ofgem’s powers would have been statute barred no matter how long its investigation lasted

As you also know, all Ofgem had to do to “stop the clock” was to write to Npower and inform it that Ofgem had received the complaint, and would be conducting an investigation. Taking that simple step (which should have been a standard procedure) would have been all that Ofgem needed to do to prevent its power to impose a fine from slipping through its fingers, which is what actually happened.

Having effectively neutered itself, Ofgem decided that the best it could do after that was to abandon the Energywatch complaint proper, “focus” upon some minor trivia, and persuade Npower to agree to pay back less than 2% of its ill gotten gains to around 10% of the affected customers.

As you say, Ofgem “…failed the consumer and themselves miserably“.

DirectDebacle wrote: »

Further it is not within the remit of Consumer Focus to conduct the investigation they did.

Actually, I think you will find that the remit of Consumer Focus is very wide indeed, and that it was perfectly entitled (and justified) in conducting its own investigation, including taking specialist legal advice.

DirectDebacle

Sterling wrote: »

What actually happened, as you yourself discovered, was that Ofgem sat on the Energywatch complaint for almost two months. This delay was fatal to Ofgem’s power to impose a fine on Npower. The statutory time limit is 12 months from the date of the action complained of. In this case the first action by Npower mentioned in the Energywatch complaint occurred on 1st May 2007. Ofgem received the Energywatch complaint on 7th March 2008, i.e. only ten months after the alleged wrongdoing.

Consequently, Ofgem had almost two months to commence its investigation before running out of time. Furthermore, the same regulations provide a “stop the clock” mechanism whereby once the investigation is commenced, the calculation of time running under the said time limit ceases to run, and none of Ofgem’s powers would have been statute barred no matter how long its investigation lasted

As you also know, all Ofgem had to do to “stop the clock” was to write to Npower and inform it that Ofgem had received the complaint, and would be conducting an investigation. Taking that simple step (which should have been a standard procedure) would have been all that Ofgem needed to do to prevent its power to impose a fine from slipping through its fingers, which is what actually happened.

Having effectively neutered itself, Ofgem decided that the best it could do after that was to abandon the Energywatch complaint proper, “focus” upon some minor trivia, and persuade Npower to agree to pay back less than 2% of its ill gotten gains to around 10% of the affected customers.

It was even more incompetent than that.

Energywatch requested that Ofgem examined all the changes npower made which included the changes made on Nov. 1st, 2007. As we know these changes caused retrospective overcharging and were the cause of the bulk of overcharging that npower are now returning to customers.

Ofgems excuse for failing to issue a stop the clock notice was that 2 months was insufficient for them to examine the evidence and that is why they claim they became time barred in respect of fining npower.

They failed to recognise that they had in fact until Oct 31st, 2008, giving them in effect 8 months not two to issue a stop notice.

As you say issuing a stop the clock notice is a simple uncomplicated matter and in this case should have been considered from the outset.

It appears that from the start Ofgem made their minds up that they would ignore the bulk of the Enerywatch wide ranging complaint and narrow it down to the period of May-Oct 2007 and the impact that the change made on 1st May would have on accounts for that 6 month span.

Ofgem even stated to the press that energywatch had specifically requested them to examine that period, which was a gross mis-representation of the energywatch complaint.

In correspondence I asked Ofgem to explain this. They agreed they had until October 31st but, perhaps not unsurprisingly, never explained why they had let this date pass too.

I find it difficult to believe that they were not aware of it. They knew npower had made further changes in November 2007. They had evidence from customers included with the energywatch complaint, they had further evidence from the public which they themselves had requested and there were articles in the press.

Furthermore in June 2008 they requested a copy of my court papers from npower. Those papers explained npowers conduct since 2004 regarding 'sculpting'. Ofgem would have been in little doubt as to the scale of the problem and that it extended far beyond their chosen parameters of investigation. They have consistently failed to explain why they chose to conduct such a narrow investigation.

We agree that Ofgem were negligent and in that I think we are being rather kind to them.

If there were to be an article in the press on quangos that give value for money then I would hope this would feature in any assessment of Ofgem. A regulator charged with protecting consumers but will not deal direct with those consumers or directly accept their complaints, yet gives those it regulates unrestricted direct access, is somewhat questionable.

Upwind

Well done to all who contributed to this thread and in particular for the enormous contributions and efforts of both Sterling and DirectDebacle.

Back when I made my own claim (settled out of court for £500) both of these gents were an enormous help to me and gave me the belief and fortitude to see my claim through. They have continued to fight the good fight and having won several smaller battles have now prevailed and won the war.

Well done guys - job done..!!

undaunted

DirectDebacle wrote: »

We agree that Ofgem were negligent and in that I think we are being rather kind to them.

If there were to be an article in the press on quangos that give value for money then I would hope this would feature in any assessment of Ofgem. A regulator charged with protecting consumers but will not deal direct with those consumers or directly accept their complaints, yet gives those it regulates unrestricted direct access, is somewhat questionable.

Totally agree with your views on Ofgem - I'd even go so far as to say that anyone who didn't know better could think somebody was on the fiddle they way they conduct matters - but who do you think is ever going to do anything to improve / replace them with a more competent body?

davidgmmafan

Even without the threat of the fine, which they would've been able to deploy if they were competant, they could've still done more to strongarm NPower. Demand the facts then approach NPower and say look we're going to the media to say you have overcharged by X amount. Sort it out and we can at least issue a joint statement.

Come to think of it how DID Consumer Focus manage to bring about such a result without such powers? Maybe they did the above???

DirectDebacle

davidgmmafan wrote: »

Even without the threat of the fine, which they would've been able to deploy if they were competant, they could've still done more to strongarm NPower. Demand the facts then approach NPower and say look we're going to the media to say you have overcharged by X amount. Sort it out and we can at least issue a joint statement.

Come to think of it how DID Consumer Focus manage to bring about such a result without such powers? Maybe they did the above???

Consumer Focus succeeded simply by doing the job that Ofgem failed to do. C.F. investigated the complaint that energywatch originally submitted to Ofgem, took legal advice which was of the opinion that npower were in breach of contract and armed with their evidence and legal advice entered into discussions with npower.

One can only speculate as to the nature of these discussions but at times must have been very hard indeed. Let us not forget that until this point npower were a company in denial. They vehemently denied any overcharging, let alone wrongdoing and the two parties would have been poles apart at the outset. It must have come as a real wake up call to npower when they had sight of the legal opinion that C.F. would have presented to them.

Given npowers stance and the fact that they had been all but exonerated by the Ofgem investigation C.F. had to box clever. It is perfectly reasonable to assume that if C.F. had gone in with all guns blazing, demanded a full refund, unreserved apology, repayment of the 2004 overcharge plus interest, full admission of liability etc then npower may well have said, 'OK, take it to court then'.

C.F. having their hand called would either have to back down or go to litigation. The latter was fraught with danger. Despite strong legal opinion in their favour, court verdicts cannot be predicted and C.F. could have faced a heavy defeat. Even if they had won the consequences for npower would be so dire (I would expect a public outcry for their licence to be revoked) that they would have no alternative but to appeal the verdict and carry on appealing it all the way to the House of Lords if necessary. This would have locked it up for years and would mean that customers would wait interminably for any restitution.

C.F. did an outstanding job and it was a job they should never have had to do in the first place. It should have been done by Ofgem and they failed.

So even if npower (in my opinion) have 'got away with it' in terms of a fine or other punishment at least they have not retained their ill-gotten gains, which has fulfilled the reason this thread started in the first place.

Totally agree with your views on Ofgem - I'd even go so far as to say that anyone who didn't know better could think somebody was on the fiddle they way they conduct matters - but who do you think is ever going to do anything to improve / replace them with a more competent body?

Unfortunately Ofgem are not on the govt. 'quangos to be looked at' list.

One reason may be that their cost to the taxpayer is quite small.

Their Resource Accounts for 2009/10 (http://www.ofgem.gov.uk/Pages/MoreInformation.aspx?docid=380&refer=About%20us/CorpPlan) state their income was £50.578m. Of that £35.219m was from licence fees. That is from the energy companies.

Page 17 of the accounts refers.

Page 21 lists the remuneration the management receive for all their hard work.

I cannot claim anyone is, as you put it, on the fiddle. What I would say is where a public body is almost wholly funded by the taxpayer then the taxpayer quite rightly expects that public body to deliver outstanding service, value for money and to have their interests put above all others.

I am not sure what the attitude is of a public body that is almost wholly funded by private enterprise, in this instance, the energy companies.

Edit. Just had a quick look on Ofgem site and not a word about this npower result. Wonder why not.

Cardew

DirectDebacle wrote: »

Edit. Just had a quick look on Ofgem site and not a word about this npower result. Wonder why not.

What a contrast to their self congratulatory and triumphant Press Release about obtaining an average payout of £6 for a fraction of NPower' customers.

I obtained all the information ofgem would release on this 'investigation'(I use the term in its loosest connotation!) under the Freedom of Information Act.
Reams of irrelevant rubbish, but no minutes of meetings(they apparently don't take them) in fact no meetings at all, either internal or with Npower as far as I could gather.

What was discussed, by whom remains a mystery.

RM5_2

Thanks to all of you (DD, sterling, cardew et al) who stayed on the heels of npower and managed to bite them where it hurts with the help of consumer focus.
After getting my £80 refund, I kind of lost interest and was amazed to see the issue back in the news 2 years on. Let's hope the letters and payments actually arrive by end of November. Since all previous refunds were not for overcharging, but as a courtesy because handling the complaints took them so long, I expect even those of us who got some money back should still be included in the automatic refund.
The npower press statement is quite interesting:http://www.npowermediacentre.com/Press-Releases/npower-makes-special-payments-to-gas-customers-eb3.aspx
They are still trying to spin it in a way that most customers were better off, but consumer focus forced them to do exactly the right thing and refund the extra primary units that were charged in breach of contract, ignoring the other advertised changes in the tarrifs. Consumer focus also realised that the amount overcharged depends on where you start the year and the refund will be calculated based on the customers start date at npower, which is fair enough. Those with March 1st as anniversary will get the largest refund, those starting Nov 1st the smallest.

DirectDebacle

RM5 wrote: »

.... I expect even those of us who got some money back should still be included in the automatic refund.

....... Those with March 1st as anniversary will get the largest refund, those starting Nov 1st the smallest.

Wholeheartedly agree with your post. I did enquire of Consumer Focus the range of dates npower would be looking at to calculate refunds and here is an extract of the reply:

With regards to your specific query, the payments do cover the period October 2006 to October 2008 to take into account the changes on 1 May 2007 and 1 November 2007

.

Consumer Focus have put Ofgem to shame.