Scottish Power has been fined £750,000 (€921,000) by the UK energy regulator Ofgem following an investigation into price differences between payment methods.
The company will pay the amount to a consumer campaign called Energy Best Deal.
Go deeper with GlobalData
Under the investigation, Ofgem has discovered that between September 2009 and December 2012, Scottish Power did not have a robust process in place to assess the costs associated with different payment types and set prices accordingly.
As per the rules of Ofgem, energy suppliers can only have different prices for different payment methods if the amount reflects the costs involved in supplying those accounts.
Ofgem said that during investigation Scottish Power’s price differential between standard credit and direct debit payment methods was out of line with that of other suppliers.
See Also:
Scottish Power has significantly decreased its price differential since the investigation was launched, Ofgem said.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Thank you!
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form
By GlobalDataThe company has also taken steps to ensure that it can comply in future.
Ofgem Senior Partner in charge of enforcement Sarah Harrison said suppliers need to clearly justify the different prices they set for different payment methods.
Harrison said, "In this instance, Scottish Power did not have a robust process in place when setting their prices to ensure that the difference between their tariffs complied with Ofgem’s rules.
"We’ve held them to account for this and they will now pay £750,000 to benefit Energy Best Deal.".
Energy Best Deal is a public awareness campaign run by Citizen’s Advice. It is aimed at helping improve the confidence of domestic energy customers across England, Wales and Scotland to reduce their bills and get help if they are falling behind with energy payments.
.gif)
