Npower To Refund Customers £70m - 01/10
After a three year long feud over gas price structure changes made by npower in 2007, the energy firm has now agreed to refund 1.8m customers who were left out of pocket due to the pricing structure change. The payout which is reported to be around £70m is one of the biggest payouts of it's kind made by an energy company.
In 2007 Npower changed its pricing structure by increasing the number of primary units it charges on the higher rate for gas and lowering the price of the secondary units. Although Npower claimed that the majority of users benefitted, many low using customers claimed that their bills had increased.
After an ofgem investigation Npower offered to refund 200,000 customers an average of £6 each. However following legal action by a number of customers and a campaign by watchdog consumer focus, Npower have finally agreed that they had not communicated the changes well and have agreed now to refund 1.8m customers an average of £35.
In a statement, Npower said: "Although the vast majority of our customers benefited from the combined effect of the changes, some, who were low users of gas, did not."
"We are sorry that the complexity of the changes we made caused confusion. We are now doing all we can to improve our communication with customers."
Npower have now agreed to write to customer's over the next two months, even if they are no longer with Npower. Customers will then be able to take their letters to the post office to cash in their refund.
Head of Consumer Focus Mike O' Connor stated:
"Consumer Focus has worked closely with Npower to ensure that refunds are made fairly and that no customer loses out,"
"A huge amount of work and collaboration has resulted in the right thing being done by Npower for its customers and we welcome this."
"It has been an great example of how consumer organisations can work with industry to deliver a fair deal for consumers."
Those not eligible for a refund include: electricity customers, business electricity and gas customers, gas pre-payment meter customers, Gas Guardian tariff customers, 2009 Price Fix tariff customers, Tracker tariff customers, 1st steps customers, Sign Online v8 tariff customers, and those with a debt greater than the compensation due.