NPower gas 'sculpting'

shoopshoop

Well, I have had a reply from npower and amazingly they haven't quoted Ofgem at me (at least not yet, maybe they're saving it for later?). Their letter basically consisted of:

1/ Background to the 2-tier tariff structure - they'd introduced it because quarterly fixed charges were unpopular & so withdrawn.

2/ Reason for seasonal weighting - so they recover fixed costs equally from all customers. If they didn't do this those who use little or no gas in the summer months wouldn't make a fair contribution.

3/ Reason for temporary suspension of seasonal weighting - due to introduction of single billing system (emphasising complex nature of this move which was still complex (aren't they clever!) even with suspension of seasonal weighting.

4/ They reduced cost of tier 2 units and increased the dual fuel discount from £60 to £80 - as a package of measures which need to be taken together!

They ended with "I trust this rather lengthy explanation provides reassurance that you have not been incorrectly charged"......um....NO!

Is the next step the small claims court or do I need to go to Executive complaints? Advice please.

Thanks

Shoopshoop

alleycat`

I got that letter - it is a standard one..
Executive complaints is your next stop on the loony train...

DirectDebacle

Interesting they are still banging out that letter. It is one of several variations of the same excuses all of which have been shown to be rubbish. That indicates to me that they still haven't found a satisfactory way to justify the 'sculpting' and probably never will. So they will pump out letters like this all day long in order to delay the inevitable.

Alleycat is correct. Next step Executive complaints. Go in strong to avoid more lame excuses and delay. Tell them you are well aware of the situation and that you will not accept 'goodwill' payments unless they are at least of equal value to your claim (including expenses/compensation). Put the ball in their court and give them 14 days to settle or you will take them to court. Remind them they settle claims against them, in full, out of court, rather than have the embarrasment of disclosing their malpractice in public. Tell them it will be far more cost effective for them to settle with you now, in full as their costs will increase if they refuse to re-imburse you.

Words to that effect anyway. I am sure you get my drift.

Good luck.

meggsy

Well done Andy (DD) and The Times for not giving up on this overcharging issue.

To pay refunds of £6 to some customers is an insult.
For anyone new to this thread I was overcharged on over 2,000 units and npower paid a 'goodwill' payment of £75 last year. A template letter is also available on the link below

http://www.timesonline.co.uk/tol/money/property_and_mortgages/article5775175.ece

We are still with npower on the basis of 'better the devil you know' ! For dual fuel there is to be only one account and one direct debit, and billed only twice a year, so I can hardly wait to see the September-March one after this cold winter :rolleyes: I've been taking monthly readings and sending them in !

DirectDebacle

Thanks for drawing attention to that meggsy. A good article. Great to see that others are still claiming successfully and it keeps the pot boiling. They say too many cooks spoil the broth. In this case we want as many cooks as possible dipping into npowers pot. Keep on stirring folks.

DirectDebacle

meggsy wrote: »

We are still with npower on the basis of 'better the devil you know' ! For dual fuel there is to be only one account and one direct debit, and billed only twice a year, so I can hardly wait to see the September-March one after this cold winter :rolleyes: I've been taking monthly readings and sending them in !

I am sure you will keep your eye on the ball. The bill to watch is the one after. I am fairly certain that during that period there will be a price decrease. This will present the ideal opportunity to fiddle about with the percentages.

They now define a year as any continuous period of 12 months. They re-invented a year as a 'tariff year' and any continuous period of 12 months may become 'any continuous period of 12 months where there are no changes to prices or the way we charge for gas.', known as a non-continuous year or Continuous Interruptus.

As Ofgem, apparently, never queried a 'tariff year' I think npower are almost certain to try a similar wheeze sooner or later. Be disappointing if they didn't. Spoil all our fun.

DirectDebacle

My italics. Does anyone else think this looks a tad deja vu? Looks to me that it could almost have been pulled from a press report quoting npowers response to the 'sculpting' allegation.

MSE_Archna wrote: »

[FONT=&quot]Note to editors[/FONT]

• [FONT=&quot]The investigation was in relation to so-called two-tier tariffs which have two payment levels. The amount of gas consumed during the tariff year that is subject to the higher charge varies according to season. Every time Npower altered its charges it started a new tariff year on which charges are based. So some consumers whose consumption had taken them into the lower level charges were placed back on the higher level when new charges were introduced, although the vast majority of customers benefitted from the reduction in prices also made at that time. Npower has now revised the wording of its contract information in order to clarify the period over which the higher tariffs are calculated. [/FONT]

meggsy

http://www.timesonline.co.uk/tol/money/consumer_affairs/article5798330.ece

:T

DirectDebacle

Below is one of several emails I sent to the Times. I think the report Meggsy provided the link for is the first of several that the Times will be doing. They are going into battle on our behalf to try to persuade Ofgem to re-investigate npower over the sculpting scam.

Also they want to turn the spotlight on Ofgem over the way they handled this investigation, Ofgems' role as a regulator and how effective they are in protecting consumers interests and the accesibility and ease the consumer has to having their complaints heard and dealt with properly.

I am sure they would welcome sensible suggestions and examples of consumers experience in all these matters. The more evidence (that can be substantiated) the better. This could be the start of consumers receiving the protection and service from the regulator that they deserve.

Hi Mark,

Since we spoke and our emails I have been trying to take this matter forward through official channels. You will recall that the complaint that Ofgem investigated was submitted by Energywatch, as was. I never saw the wording of the complaint that they submitted but it was either pared down by Ofgem or not properly explained by Energywatch in the first place.

At the time of my battle with npower I had to show (to the court if it was heard) that I had taken all steps available to me to resolve the matter before taking out the court action.

These steps were as follows.
Deal direct with npower. It quickly became clear that they didn't want to know.
Complain to the Ombudsman. npower already knew that this matter would not fall under the Ombudsmans remit and they would not deal with it. In actual fact npower told me this and I had this confirmed by the Ombudsman. npower therefore knew that customers were being driven into a cul de sac and no doubt that is why some will have settled for the 'goodwill' payments.

My next port of call was Energywatch who again told me that it was not within their remit. Presumably they hadn't received sufficient complaints to warrant forwarding their own complaint to Ofgem at the time I contacted them. Another door closed in my face.

The point is that Ofgem, OFT etc. will not take complaints from individuals. This means that any complaint has to be forwarded by a third party. Consumer Focus is the main point of contact now and they are less equipped to deal with complaints than Energywatch was.

So this week I contacted Consumer Focus. They were unaware of the Ofgem ruling! I explained it to them and asked how I could contact Ofgem to discuss the matter with them and have the issue of 'sculpting' investigated. I was told I couldn't but Consumer Focus would send an email to Ofgem. I was told that their email had to be very brief. I was advised to contact my MP. (Already been there, done that).

I then decided to telephone Ofgem. After going through the options I was automatically transferred to Consumer Focus. I tried a different no. and spoke to a human. This person transferred me to Ofgem's library! The librarian was unaware of Ofgems ruling but gave me a phone no. for Consumer Affairs. This no. was another line into Consumer Direct. So back to square one.

Next I tried the OFT. I did speak to someone who told me that Ogem had the same powers as OFT and that I needed to contact Consumer Direct about it. Great.

So the regulatory bodies have several layers insulating them from the public. All that exists is Consumer Focus which is even weaker than Energywatch was. The energy companies I am sure have direct access to the regulators. I expect there was much communication between npower and Ofgem during their investigation. I wonder how much consultation there was with Energywatch. Details of the investigation should be made public, not just the result. Why is there no right of appeal for either the energy company or the compainant?

This is a sorry state of affairs where the consumer has no access to any meaningful organisation to safeguard their interests.
As an individual I feel terribly let down. If I had held back on the court action and waited for the Ofgem ruling I would be even more furious. The only course of action open to customers now would be to make a complaint of fraud to the police or mount a private prosecution against npower on behalf of their cheated customers. The former is a possibility but the latter isn't. I can't say that Ofgem are in bed with the energy companies but they are very close neighbours. Customers are at the other, less solubrious, end of town and clearly should be avoided.

DirectDebacle

A long winded one even by my standards. However an example of perhaps the sort of thing the Times may be looking for. Doesn't have to do with npower. Any problems you may have encountered having complaints dealt with by other suppliers will be just as useful.

Hi Mark,

Below are the terms of reference for the investigation Ofgem conducted into npower. This is from their website.


Company: Npower (June 2008)

Investigation into compliance by companies in the Npower group with obligations under their gas supply licences

Ofgem is investigating compliance by licensees in the Npower group with Standard Condition 44 of their Gas Supply Licences (Notification of terms) as in force on 1 May 2007.


As usual the following are my thoughts and opinions I am sharing with you. I profess no expertise in the workings of Ofgem. In fact I have very little knowledge at all of how they work.

You are as aware of the background to this as anyone and you know that Energywatch were receiving complaints re 'sculpting' from customers before your articles appeared. Indeed prior to Ofgem receiving this complaint from Energywatch, Ofgem had already opened an investigation into 'mis-selling' as a result of your papers expose of it. I am sure it was pressure from you and your paper that Energywatch were prompted to make their complaint.
Over the years Ofgem have investigated and fined npower for a variety of breaches of regulations and at the time of Ofgem receiving this complaint npower were top of the league for customer dissatisfaction and complaints. Their competitors are not much better. The industry was, and still is, riding roughshod over the consumer.

That is the background to the situation when this complaint arrived at Ofgem.

I have no knowledge of the evidence contained in the complaint or how the investigation was conducted. What I can do is take the ruling and work back from that.

On the face of it this appears relatively simple. Ofgem were tasked to investigate npowers notification of terms policy from 1st May, 2007. They found that npower were not complying with the regulations and also the non-compliance had caused 200,000 customers to be overcharged £6.00 each. I would assume Ofgem studied the terms and conditions and asked npower why they had not notified the changes introduced at the end of April 2007. I expect that npower would have stated that from May 2007-October, 2007, most customers would have been better off as a result of the changes and therefore there was no requirement under the regulations to notify the changes. For the six months May to October I myself was about £14.00 better off for that period as a result of the changes.

Ofgem would have come back with, ' If most were better off that means some weren't. How many and by how much did the remainder lose out by?' npower come back with 200,000/£6.00. Case closed. Ofgem order npower to be more careful with their notification procedure and to re-imburse the out of pocket customers. No fine or punishment. No incentive for npower to change their ways or even feel they even did anything wrong.

If the above is the case (it is probably something very similar) then this raises a few questions.

The original 'open investigation' published by Ofgem on their web site was that they were investigating npower for 'billing irregularities'. This sounds more in keeping with a complaint that Energywatch may have submitted in respect of sculpting. Unfortunately I never downloaded this page.

If that were the case at what point did it become a very specific investigation into one isolated incident of breaching a notification regulation, and why? Remember we are dealing with a disreputable company with a previous history of wrongdoing, fines and punishment.

This comment from Ofgem is telling,


Note to editors
• The investigation was in relation to so-called two-tier tariffs which have two payment levels. The amount of gas consumed during the tariff year that is subject to the higher charge varies according to season. Every time Npower altered its charges it started a new tariff year on which charges are based. So some consumers whose consumption had taken them into the lower level charges were placed back on the higher level when new charges were introduced, although the vast majority of customers benefitted from the reduction in prices also made at that time. Npower has now revised the wording of its contract information in order to clarify the period over which the higher tariffs are calculated.
• (These are my bold italics. This part of their statement looks like it could have been quoted to you by an npower spokesperson answering one of your sculpting questions. Seven months to come up with this!)
It is obvious that Ofgem were aware of seasonal weighting and re-starting the Primary Block. They also knew of the existence of a tariff year. In May 2007 none of this information was contained in the terms and conditions published by npower. Therefore it either had to have come from the evidence supplied by Energywatch or have been volunteered by npower, or both.
Either way Ofgem were presented with a most serious breach of the terms and conditions and regulations. An unwritten and undisclosed rule, peculiar only to npower, designed to facilitate mass overcharging. This was either accepted as within the regulations, it was investigated and found to be acceptable practice or just ignored.
If it were investigated, why was there no mention of this by Ofgem or explanation as to how they reached their conclusion? Whichever way you look at it, it is most unsatisfactory and is a clear neglect of duty by Ofgem. They have failed to investigate a complaint properly.
Who regulates the regulators? Do they investigate themselves or is there a supervisory body where you can complain to about Ofgem.

The next question I ask myself is how this investigation was conducted. Were witnesses for the two parties (npower and Energywatch) called to Ofgems’ offices for interview? Did Ofgem personnel visit npower? Was it all done over the telephone/email? (During my battle I was invited by npower to an all expenses paid meeting at their H.Q. plus lunch. I refused). Were paper statements from witnesses (customers) available and if so were they interviewed, bills scrutinised etc.? I wonder how ‘official’ this enquiry was, or how chummy.

How did Ofgem arrive at the figure of 200,000 customers? Did they identify them from their own diligent examination of npowers billing records? Or was it the case that npower came up with this very round number and Ofgem just accepted what they were told. Odd how all these customers lost exactly £6.00 each. I suppose they used exactly the same amount of gas. Perhaps they all live in the same house.

It is all too opaque and can only lead to suspicions of a cover up, corruption etc.
As the saying goes, ‘justice must not only be done but be seen to be done’.

The problem with the system is that there is a blurred line between ‘sharp business practice’ and criminal activity. This blurred line will often contain elements of both, which allows for organisations to refuse to take ownership. In this case Ofgem may well have looked at the matter as a whole and decided that any criminal side of it or an aspect that was not within their remit, they would not investigate. Further they may well have decided that any matter that they were unhappy with but unable to investigate they would just let lie and not forward to the appropriate authority. This is all speculation on my part but leaves consumers with the thought that if they cannot rely upon the regulator to properly regulate and investigate, who can they rely on.

There should be some guideline that if a regulator receives a complaint that contains a criminal element to it then, additionally, that complaint should be automatically forwarded to the appropriate authority for those elements to be investigated. This would normally be the police.

The mis-selling you exposed is clearly is an example of theft and forgery. Ofgem could have investigated the regulatory side of it and ruled that doorstep selling of energy is prohibited. The police could have investigated the individuals and companies involved bringing charges against those they considered had acted unlawfully. This would be more satisfactory than the current situation which serves no-one but the energy companies.

We don’t need new laws, we need a new system of regulation and investigation. It took a meltdown of the banking sector before refinement of the FSA was mooted. What will it take to reform the function of energy regulation?
Using your contacts you may well be able to find out the answers to some of my questions. Any ex Energywatch contacts may be able to shed some light on the exact nature of the complaint filed with Ofgem. Ofgem themselves should also be willing to supply this information. It may be worth considering a FOI Act request and get hold of all the papers from Ofgem if they are unwilling.