Npower faces curbs on sales after customer service failures

power station

Energy supplier Npower has been told that it may have to stop sales to new customers unless it can send out bills on time.

The regulator, Ofgem, has warned the supplier that it needs to meet monthly targets on late billing.

Unless it meets the targets by the end of August, Npower will have to stop all "proactive telesales" to new customers, the regulator warned.

In a statement, Npower said that it was apologising to its customers "again".

The company has topped the complaints tables for the "big six" energy firms every quarter since the end of 2012.

Last month, Citizens Advice said its customer service operations were "unacceptable".

Start Quote

We have been increasingly concerned about the slow progress to tackle failings”

End Quote Sarah Harrison Ofgem

Earlier this week, consumer group Which? said Npower had received 83 complaints per 1,000 customers in the first quarter of 2014, nearly twice as many as the next worst performer.

Apology

Separately, Ofgem is to launch an investigation into Npower's customer service failings.

The company could face another fine if it is found to have broken the rules under the regulator's new standards of conduct.

It was fined £2m by Ofgem in 2011 and was forced to apologise to its customers in December 2013.

"We have been increasingly concerned about the slow progress to tackle failings," said Sarah Harrison, Ofgem's senior partner in charge of enforcement.

"Npower's recovery plan has not delivered as far and fast as is necessary. Our analysis of complaints data also raises some serious concerns, which will be thoroughly examined in our investigation," she said.

The company said it had hired 650 people more since December to try to resolve the problems with its computer system.

It said it would be investing an extra £20m this year to help improve customer service.

"We are committed to getting things right for our customers but recognise that despite the progress we have made, our current billing standards have fallen short of where everyone wants them to be," said Paul Massara, Npower's chief executive.

'Bill shock'

Citizens Advice, which has highlighted problems with Npower, welcomed the regulator's clamp-down.

"Exposing customers to bill shock is completely unacceptable and can throw household budgets into disarray," said Gillian Guy, the Citizens Advice chief executive.

"For people struggling to make ends meet, finding hundreds of pounds to pay a large bill out of the blue can be impossible," she said.

However, Npower said that in May, 92% of its customers were sent their bills on time.

It said it was offering extended repayment periods for anyone who had had problems as a result of getting a bill late.

It also said that anyone who received a bill that was more than 12 months late would not have to pay it, if the fault was with the company.

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