It comes after British Gas was also fined £2.5m in July for similar reasons, and reinforces Ofgem’s focus on ensuring that consumers obtain the service they expect from energy companies.
The Ofgem investigation found that npower had failed to record all the required details of domestic and micro-business complaints received; failed to provide customers whose complaint it could not resolve with some key details about the redress service provide by the Energy Ombudsman; failed in some respects to put in place adequate policies and processes for dealing with complaints in an efficient and timely manner.
Npower has addressed and remedied all the breaches of the regulations which Ofgem identified. Ofgem is also investigating the way in which EDF Energy handles complaints.
The complaint handling regulations took effect from October 2008 and complement the role of the Energy Ombudsman. The regulations set out minimum standards that domestic and micro-business energy customers should expect from energy companies if they raise a complaint.
Ofgem’s senior partner for sustainable development Sarah Harrison said: “Consumers have a right to expect that energy companies will comply with the standards. Npower failed to do so and although it took remedial action, it has incurred a penalty for failing consumers.
“Energy suppliers now have a golden opportunity to convince consumers that they can be trusted, by getting behind Ofgem’s sweeping reforms for the retail market. This is the quickest way of restoring consumer trust in an industry badly tarnished by poor supplier behaviour.”