This week Ofgem announced that, following an investigation into small supplier Spark Energy, the provider has “failed to treat its customers properly while establishing itself in the marketplace”.
The investigation found that the failings included breached switching rules and handling of customer complaints. These issues occurred mostly between 2010 and 2013.
The Ofgem investigation was opened in June 2013, after the regulatory organisation received information about the above issues, and following a BBC Watchdog episode probed into claims from customers that it was “impossible” to switch away from the energy supplier.
The Watchdog episode focused specifically on tenants whom were in properties let by Your Move, Foxtons and Reeds Rains, because they had been automatically signed up to Spark as part of their lease. Though it was in the tenants’ right to switch supplier, many who attempted to faced several stumbling blocks.
At the time, both the letting agencies and Spark Energy claimed their practices were in accordance with the guidelines.
High number of complaints
Ofgem opened their investigation and found that the supplier amid a high number of complaints about switching, billing and refunds. Ofgem stated it was also concerned with how the supplier was handling these complaints.
According to a report released Monday, the regulator found that Spark Energy had “… blocked customers from switching to other suppliers, and trasnferred certain customers to other suppliers without their express consent, to stop them building up more debt … In addition, the supplier did not bill customers correctly, nor return refunds promptly.”
The fine amount, it was also noted, factors in the seriousness of the breaches as well as the size of the supplier. The £250,ooo will be paid to Citizens Advice to will be split equally between their Scotland and England/Wales divisions.
The report released this week included remarks from the senior partner in charge of enforcement at Ofgem that Spark had made significant progress since the investigation began, including putting new processes in place to resolve issues.
Spark themselves have noted that it hasn’t always gotten it right when it comes to treatment of customers. Scott Mackay, Director of Brand and Experience at Spark Energy had this to say in a uSwitch exclusive Meet the Small Supplier piece:
“We’re niche focused so we do things differently and we try harder. We haven’t always got it right, but our focus now is on providing customers with a five star service. Our call waiting times are amongst the best and nine out of 10 complaints are resolved within 24 hours. Our Price Guarantee means prices and always fair, simple and competitive – for example we have the cheapest variable product in the energy market today and no tie-ins or exit fees on any of our tariffs.
“We believe that different is good and while we can’t fix all of the energy industry’s issues, we do give customers our best prices from day one. We also remove as much hassle as possible and will then be there for them within seconds when they have a question, an issue or need to make a change. We can also constantly improve and this is something we are proud of.”