Although energy companies typically charge customers who do not pay by direct debit more, Ofgem found that the difference in price for ScottishPower customers who did and didn’t pay by direct debit was excessive and unjustifiable.
ScottishPower’s charging practices were found to be substantially different from the rest of the big six energy suppliers and as a result Ofgem has forced the gas and electricity provider to pay £750,000.
ScottishPower’s non-direct debit customers will not be reimbursed.
Ofgem: ‘We’ve held them to account’
Speaking on the fine, Senior Partner for Enforcement at Ofgem Sarah Harrison, said: “Suppliers need to clearly justify the different prices they set for different payment methods.
“In this instance, ScottishPower 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.”
Ofgem added that ScottishPower had collaborated fully during the investigation and had since cut its charges for non-direct debit customers in half.
Money will go towards helping low income households
The £750,000 will be added to a fund aimed at helping low income households pay their energy bills. Back in October 2013, ScottishPower was fined £8.5m for misleading consumers via its doorstep and telesales practices.
A spokesperson for ScottishPower said: “We recognise that historically we did not have a robust process in place but we are pleased that Ofgem has concluded its investigation and made no finding that any specific impact on customers resulted from our failure to have these processes in place.
“We fixed this problem by December 2012 and all of these processes are now fully compliant.”
The payment follows an Ofgem enforced £12m fine issued to E.ON for mis-selling energy, last week. The latter represents the largest fine ever imposed by the energy regulator.