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

edited 1 October 2010 at 1:48AM in Energy
174 replies 21.4K views
MSE_GuyMSE_Guy MSE Staff
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edited 1 October 2010 at 1:48AM in Energy
This is the discussion thread for the following MSE News Story:

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  • tommadtommad Forumite
    2 Posts
    any ideas what to do if you were an Npower customer then, but have both moved house and changed suppliers?
    Thanks!
  • tommad wrote: »
    any ideas what to do if you were an Npower customer then, but have both moved house and changed suppliers?
    Thanks!

    Here is an extract from npowers press statement.

    'There’s no need for customers to do anything – although a help line 0800 975 7938 will be open from Monday 4th October. We will be contacting all 1.8 million eligible customers in the next two months even if they are no longer with npower. Payments will average about £35.'

    This payout is the result of a long running campaign by MSE'rs and others and is discussed fully in the npower sculpting thread.

    What is not clear at the moment is the period to which the payout applies.

    In 2007 npower made two changes to the way they charge for gas. The first was 1st May 2007 and the second 1st Novemeber, 2007.

    Each of these changes, separately and collectively caused overcharging. The changes also had a retrospective as well as forward overcharging effect. The date range that overcharging could have occurred is from around October 2006 to October 2008.

    I am not sure but it appears that the agreement reached with Consumer Focus is limited to the period 1st May, 2007 to 30th April, 2008. I will endeavour to obtain clarification of this.
  • edited 1 October 2010 at 8:59AM
    KimYeovilKimYeovil
    6.2K Posts
    edited 1 October 2010 at 8:59AM
    "Blunder"? Bit of a weaselly, sympathetic understatement. This is one of the very few occasions when the over-excited and over-abused 'rip off' could be deployed.

    This was a deliberate, deceitful, underhand attempt of theft by nPower. Yes, the sums involved at each transition are individually small and no different (in size) to every other adjustment made by all companies at such restructurings. BUT these clawbacks have to be made transparently in the prices charged for future tier 1 units. The way nPower carried out this fraud meant they could indefinitely swindle customers out of money without ever honestly disclosing this in their published tariffs.
  • tommadtommad Forumite
    2 Posts
    Ok thanks, We were with them for most of 07 and 08 so i'll give the helpline a try next week.
  • CardewCardew Forumite
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    Those people who have not been following this saga closely for the past 3 years may not be aware that it is largely due to the efforts of Direct Debacle(and a few other pioneers!) who originally took Npower to court and won substantial damages on this issue.

    Since then he has made great efforts to advise others on MSE, who have also won damages, as well as pursuing the case with ofgem and other agencies. His liaison with the Times has also helped to publicise this issue and not let it fade away. So well done DD.

    On a sour note – ofgem have once again proved to be absolutely useless on this issue. They originally had every chance to have solved this issue, but fouled up and have spent the next couple of years in miserable attempts to explain away their incompetence. Let us hope that later this month the Chancellor disbands this useless organisation.

    Also, it is a pity that Martin and his MSE team never got involved in this issue, despite repeated requests, in the same way they did with the Bank Charges saga.
  • 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.
  • MSE_MartinMSE_Martin MoneySaving Expert
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    Cardew wrote: »
    Those people who have not been following this saga closely for the past 3 years may not be aware that it is largely due to the efforts of Direct Debacle(and a few other pioneers!) who originally took Npower to court and won substantial damages on this issue.

    Since then he has made great efforts to advise others on MSE, who have also won damages, as well as pursuing the case with ofgem and other agencies. His liaison with the Times has also helped to publicise this issue and not let it fade away. So well done DD.

    On a sour note – ofgem have once again proved to be absolutely useless on this issue. They originally had every chance to have solved this issue, but fouled up and have spent the next couple of years in miserable attempts to explain away their incompetence. Let us hope that later this month the Chancellor disbands this useless organisation.

    Also, it is a pity that Martin and his MSE team never got involved in this issue, despite repeated requests, in the same way they did with the Bank Charges saga.

    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.
    Martin Lewis, Money Saving Expert.
    Please note, answers don't constitute financial advice, it is based on generalised journalistic research. Always ensure any decision is made with regards to your own individual circumstance.
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  • alleycat`alleycat` Forumite
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    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
  • 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

    Here is a link to some Q&A on the consumer focus website http://www.consumerfocus.org.uk/energy-help-and-advice/npower-gas-announcement

    Also the compensation will cover the full period the changes affected, not just from May 2007.

    As regards the 2004/5 overcharge, this was not considered by C.F. or discussed with npower and will require to be claimed separately.

    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.
  • davidgmmafandavidgmmafan Forumite
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    The main thing I take from this is that Ofgem are totally useless, not only did they fudge the referral made by Energywatch claiming they ran out of time (who's fault is that then?), but when something substantial is announced today it is as a result of work by consumer focus. I'm not even sure this is within thier remit, but its good work anyway.

    If there is to be a casualty as a result of the looming cutbacks I know which organisation I would retain. BTW don't forget Ofgem's other bone head move, relinquishing powers to act on prices. It gave this up VOLUNTARILY, believing competition alone would keep prices down.
    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.
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