Small energy supplier iSupply has been fined £1.5 million by Ofgem after it was found to be overcharging thousands of customers.
The energy regulator investigated claims from a whistleblower that iSupply was charging some of its customers more than the energy price cap allowed. Ofgem introduced the price cap at the beginning of 2019, setting a maximum price that a household on a default tariff can be charged for average energy usage.
However, after investigating, Ofgem found that the supplier overcharged around 4,400 customers who were on default tariffs. Between January and March this year, affected customers were overcharged £36,270 collectively, while between April and September they were overcharged an average of £53 each.
According to Ofgem, senior staff at iSupply knew that customers were being overcharged but they didn’t report it to the regulator and did nothing to address the issue. The firm has now been ordered to pay £1.5 million into Ofgem’s Voluntary Redress Scheme, which contributes funds to charities and organisations that support energy consumers.
“If a licensee breaches the rules, it quickly needs to tell Ofgem and put things right for its consumers,” said Anthony Pygram, director of conduct and enforcement at Ofgem. “However, iSupply has admitted it failed to do so in this instance.
“Suppliers must charge their default tariff customers at or below the level of the price cap. Senior staff at iSupply knew that they were overcharging default tariff customers yet failed to refund them and report the issue to Ofgem in a timely manner.
“The action we have taken against iSupply sends a strong message that all suppliers must treat their customers fairly, and quickly address known harm so that customers are protected, or face the consequences.”
Monica Collings, co-chief executive of iSupply, said: “Our expectation is that we will always provide a high-quality service to all customers. Naturally, I feel very disappointed that earlier this year we didn’t manage to do that.
“We have apologised to affected customers and made amends where they were negatively impacted. We have also worked very hard to improve our capabilities, hugely reinforcing our compliance resource and expertise to ensure this or similar issues can’t be repeated. We’re grateful to Ofgem for the way they’ve engaged with us.”
Gillian Guy, chief executive of Citizens Advice, said: “This is the second time in a year that iSupply has failed to charge customers correctly. It underlines why Ofgem’s proposed stricter regulations for new and existing suppliers should be put into effect as soon as possible.”
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