Ofgem imposes £750,000 fine on Scottish Power for payment method differences

20 May 2014 (Last Updated May 20th, 2014 18:30)

Scottish Power has been fined £750,000 (€921,000) by the UK energy regulator Ofgem following an investigation into price differences between payment methods.

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.

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.

Scottish Power has significantly decreased its price differential since the investigation was launched, Ofgem said.

"Scottish Power's price differential between standard credit and direct debit payment methods was out of line with that of other suppliers."

The 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.

Energy