Energy regulator Ofgem has warned ScottishPower to clean up its act or face a sales ban after its customer service standards plummeted.
The Glasgow-based utility yesterday apologised “unreservedly” for its failings, and said problems during the introduction of a new £200 million IT system was to blame.
Ofgem has given the firm until the end of this month to sort out a backlog of ombudsman complaint decisions or face potential sanctions.
It must also reduce the number of overdue bills from more than 75,000 to 30,000 by the end of next month, and significantly improve the speed it answers customer calls by the end of January.
The watchdog yesterday said a failure to meet its demands would result in instant suspension of ScottishPower’s right to make new sales.
The regulator has also instigated a separate investigation into the way the firm treats its customers.
ScottishPower yesterday admitted that it had failed to meet appropriate standards of customer care, and said it was committed to resolving the issues raised and was in the process of recruiting hundreds of new staff to manage customer interactions.
It said it was also committed to writing to individuals who had experienced a service problem and would pay appropriate compensation to ensure no customer was left out of pocket at ScottishPower’s hands.
“To further improve our customer service, we invested £200 million on a new customer management system,” ScottishPower’s retail and generation CEO Neil Clitheroe said yesterday.
“All of our customer accounts have now been transferred on to the new system and we are starting to see some of the benefits of that system being delivered, such as extending our call centre opening hours to the longest in the industry, and an industry-first online direct debit management service.
“The process of moving to our new system, however, has been challenging and resulted in service problems for some of our customers.
“We unreservedly apologise for these problems. It is simply not the high service standard long associated with ScottishPower, nor the customer service standards industry regulator Ofgem expects.
“We are determined to put it right. We are working hard to make it easier for our customers to contact us and to answer every call, email and complaint as soon as we can.
“We are increasing our staff by a further 250 people on top of the additional 450 people already recruited earlier this year to manage all customer contact and complaints as quickly as possible.
Ofgem said ScottishPower would have to provide public updates through its website on the progress made.
It said the firm’s sales function would be immediately suspended if it failed to make the improvement required within the scheduled timescale.
“ScottishPower’s customers are experiencing unacceptably long call waiting times and a drastic drop in overall customer satisfaction,” Sarah Harrison, senior partner in charge of enforcement at Ofgem, said.
“Ofgem’s action today will drive immediate improvements for ScottishPower customers. In a properly functioning market we would expect companies to compete keenly on service.
“The need for our intervention here is yet more evidence that the energy market is not working for consumers. This further justifies our decision to refer the market to the Competition and Markets Authority.
“The investigation we launched today is the third time we have used our new standards of conduct to make suppliers treat consumers fairly.
“This is a clear signal to suppliers to up their game and give consumers the service they are entitled to.”