OFGEM Shell Energy pays £390,000 after overcharging (1623C)
June 14 2019 - 2:00AM
UK Regulatory
TIDMRDSA
RNS Number : 1623C
OFGEM
14 June 2019
Shell Energy Retail pays GBP390,000 after overcharging some
default tariff cap customers
Shell Energy Retail Limited is to refund and compensate around
12,000 customer accounts it overcharged on its default tariffs when
the price cap was introduced. In addition, the supplier will pay
GBP200,000 to Ofgem's consumer redress fund, equating to a total
payment of GBP390,000.
The price cap for 11 million customers on poor value default
tariffs came into force on 1 January 2019.
Ofgem's price cap monitoring found that between January and
March 2019 Shell Energy Retail overcharged around 12,000
electricity and gas customer accounts a sum of GBP100,736.63
collectively above the level of the price cap.
To rectify its failings Shell Energy Retail, trading under First
Utility at the time of breach, has agreed to refund the affected
customers by re-crediting their accounts and will pay additional
compensation to all affected customers.
Around 6,200 Shell Energy Retail customer accounts were on
tariffs that were not compliant with the price cap, meaning they
were paying above than the cap level for their gas and / or
electricity. Shell Energy Retail has agreed to refund these
customers and pay an additional GBP62,000 in compensation (GBP10
per fuel).
The remaining 5,600 customer accounts experienced a delay in
their energy price being reduced under the price cap after they
requested to change to a cheaper means of paying for their energy,
which meant they were paying above the cap level for longer than
necessary. Shell Energy Retail has agreed to refund these customers
and pay GBP29,000 in compensation (GBP5 per fuel).
Shell Energy Retail has agreed to pay an additional GBP200,000
into Ofgem's voluntary redress fund to help support vulnerable
customers.
Ofgem has decided not to take formal enforcement action taking
into account the steps Shell Energy Retail has taken to address its
failings and the redress it has agreed to pay.
Ofgem closely monitors all suppliers' approach to the
implementation of the cap and will continue to hold suppliers to
account if they do not meet their obligations.
Notes to editors
-- Firstly Utility was acquired in March 2018 and rebranded
Shell Energy Retail Limited in March 2019.
-- The 12,000 customer accounts affected around 8,800 customers.
-- About 11 million households are protected by the default
tariff cap, which came into effect on 1 January 2019. The cap is
temporary, and applies to tariffs for all customers on standard
variable and default energy tariffs. Suppliers can price to the
level or below the cap, but cannot charge more.
-- The default tariff cap is currently GBP1,254 per annum for
period between 1 April and 30 September 2019 for households on dual
fuel, single-rate based on typical consumption.
-- For more information about Ofgem's voluntary redress fund,
see: Ofgem appoints Energy Saving Trust to distribute payments from
rule-breaking energy companies to charities
-- More information on the default tariff cap can be found on our website.
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END
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