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


  • jacquie2 wrote: »
    I received what I thought was another junk mail letter from npower this morning. I was about to bin it when by chance i noticed an amount of money mentioned and decided to have a closer look. It stated I was owed £54 and to claim it had to take 2 proofs of ID to the post office, A nice surprise but I can't help thinking that it should have been in an official looking envelope and not one of the junk mail ones. Are they trying to make them look like junk so we throw them out, never claim and they save loads of money. Why not take off our next bill or send a cheque? Beware!

    It's an interesting point.

    They are doing the same for all. I believe they are trying to make it outside of the customer accounts so it doesn't cloud other payments, DD reassessing, etc. Also, this way you get it, as opposed to them keeping it until yout bill overtakes it.

    Remember, if they paid it onto your account they would be making interest on it...which no one will want them to gain!

    You would think they would mark them important. If they look like junk mail, it would be nice to know in 12 months how many have not be claimed.

    I bet we will never hear about that though...unless someone (Ofgem? Unlikely) makes this part of their enforcement duties.

    A lot of customers have moved on and some may not have bank accounts so the PO option is a plus. However, I wonder just how hard they will really try to contact anyone ;)
    :rotfl: It's better to live 1 year as a tiger than a lifetime as a worm...but then, whoever heard of a wormskin rug!!!:rotfl:
  • I take it they will be paying interest on the money they stole?
  • edited 30 October 2010 at 10:25AM
    meggsymeggsy Forumite
    741 Posts
    edited 30 October 2010 at 10:25AM
    I guess you could think the letter was junk mail if you didn't previously know anything about the refunds, especially if you have switched away from them.

    While in my local PO yesterday the counter staff were wondering why this method had been chosen as well. One said I paid out four
    payments yesterday and all were for around £20 - £30.
    I hope these four people had the full refund they were entitled to receive, maybe they did or maybe they didn't ;)
  • meggsymeggsy Forumite
    741 Posts
    Kronkston wrote: »
    I take it they will be paying interest on the money they stole?

    This is the explanation in their letter ...

    "To avoid disrupting your current billing pattern, and because of the limited space on your bill or statement to allow explanation of what any credit amount is for, we've chosen to send you this one-off payment as a letter redeemable at the Post Office. We've taken the additional step of including VAT and a sum in lieu of interest. If there is, then we'll pay it directly to HMRC, so you don't need to do anything. It will not affect your tax position in any way and you should not put it on your income tax return if you complete one".
  • emtyemty Forumite
    3 Posts
    I was with Npower from June 2006 to September 2010. Been on the Online v4 tariff... never changed, didn't know I needed to.
    Now I'm getting back £37.50 - can't be right!
  • edited 30 October 2010 at 5:24PM
    DirectDebacleDirectDebacle Forumite
    2K Posts
    edited 30 October 2010 at 5:24PM
    emty wrote: »
    I was with Npower from June 2006 to September 2010. Been on the Online v4 tariff... never changed, didn't know I needed to.
    Now I'm getting back £37.50 - can't be right!

    The payment is for the amount of kWh (at the higher of the two prices) they charged over a year. The maximum they can charge at the higher rate per annum is 4572kWh.

    The maximum they could have charged you for the year 1/6/2007 - 31/5/08 is 6022kWh. That is 6022 - 4572 = 1450kWh which were charged at the higher rate but should have been charged at the lower of your 2 prices.

    I cannot say how many units you were charged over the 4572 because it depends on your gas usage. The amounts are shown on bills.

    All of the additional units over this period are likely to be have been charged after the 4/1/08 price rise. Therefore the additional cost is the amount of excess units * the difference between the 2 prices plus VAT plus interest.

    In the above example and using my price differential of 4.333p an extra (1450*4.33) £62.83 + VAT would have been charged.

    Your payment does not seem correct but without knowing your precise usage and the period npower have used to calculate it, I cannot be sure. There may also have been a different method applied to your tariff.

    If you have your bills then check them. If their figure does not appear correct I would query it with them and ask how they calculated this amount.
  • I've been with Npower for years and still am,i unexpectedly received a letter today with a refund of 12.82.

    As others,i've no idea if this is correct as i'm hopeless with maths etc so can't work it out.
  • I've been with Npower for years and still am,i unexpectedly received a letter today with a refund of 12.82.

    As others,i've no idea if this is correct as i'm hopeless with maths etc so can't work it out.

    Not easy to answer so I will try to explain.

    The money you have received is for an overpayment you made back in 2007/8. At that time you were almost certainly charged for the correct amount of gas you used (units or kWh, same thing) but some of those units were charged at the incorrect price.

    You are probably aware that your gas is charged at two prices. The higher price is for the first 4572kWh per year. Gas used over this amount is charged at the lower price.

    Usually this 4572, known as the Primary Block, is spread evenly over the year. That would be 381kWh per month. So in the summer you use little gas say 200kWh in a month then all of these will be charged at the higher price. In the winter say you used 581kWh in a month then 381kWh would be charged at the higher price and the remaining 200kWh are charged at the lower price. Very few people are billed monthly so a quarterly bill usually will show a larger number of units at each price than in my example.

    In May and November, 2007 npower changed the way they allocated the amount of Primary Block units to each month. This meant that over a 12 month period many (1.8m) customers were charged for more higher priced units than they should have been. After a long battle npower are finally refunding the overpayments.

    Despite campaigning by The Times and a huge npower 'gas sculpting thread' on this forum it appears many customers were unaware of what happened and are finding this payment a surprise, as in your case.

    Back to your question, 'how was it calculated'. The answer at the moment is we are not absolutely sure as npower have given no information for customers to be able to check.

    What they have said is that they are calculating payments using a customers anniversary date (the date you joined them) and using 12 months from that date calculating if more than 4572 were charged at the higher rate. If so the refund is the amount of units overcharged * the difference between your 2 prices plus VAT plus interest.

    I could do a close calculation of what you were due if I knew your start date with npower and a close estimate or better still billing details of your annual consumption of gas.

    Everyones payment will be different. It depends on your start date, how long you were with npower and for what period of time and what the prevailing price differentials were. In short it is almost as convoluted as the method they used to cause it in the first place.

    However it is important to be able to check because for some customers it could mean a big difference between what they are receiving and what they should be receiving.
  • edited 1 November 2010 at 7:02PM
    meggsymeggsy Forumite
    741 Posts
    edited 1 November 2010 at 7:02PM
    There is a Q & A in todays Guardian, this is the last question -

    "Is the level of payment accurate?

    Npower has worked closely with Consumer Focus to review its customer accounts and calculate fair payments for individuals. The watchdog said: "We think these payments offer fair recompense for overpayments customers made."

    However, if you still feel you have not been refunded adequately you should contact npower's helpline on 0800 975 7938 in the first instance, and Consumer Direct on 08454 040506 for further advice if you remain dissatisfied.

    Consumer Focus said that if you do dispute the payment, when you call npower you should provide your name, the address at which you were supplied with gas by npower in 2007, the period during which you were supplied, and where possible your npower account number from that period"
  • Hi, i've just received a cheque from npower for the princely sum of £34.02. I didn't know any of this was going on so i'm hoping someone can shed light on my situation! I've been an NPower customer since about 2003. I've subsequently moved addresses twice but still kept the same supplier. When i've contacted them tonight they're quoting an anniversary date of May 2007. (the date I moved to latest address). As far as i'm aware the plan has stayed the same so shouldn't they be quoting an earlier anniversary date?
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