iSupply Energy Limited, a small energy supplier, is directed by the energy regulator Ofgem to pay £1.5M following the company’s overcharging on default tariffs affecting around 4,400 of its customers that were supposedly protected by the fixed price cap.
The said company owed up to its non-compliance, citing insufficiencies in governance and processes that could have helped prevent and address the issue swiftly.
iSupply Energy is expected to pay to its dues to the voluntary redress funds and is required to refund the overcharge made to its customers.
The price cap came to fruition this year and has required suppliers to set their default tariffs below or equal to the cap.
Ofgem has found iSupply to have failed in correcting tariffs and refunding the affected customers on time. The company’s governance and processes were found to be lacking, which led to its inadequate response to the non-compliance finding.
The firm has since made refunds to the customers who were overcharged. It has also agreed to fulfil its monetary obligation to the regulator’s voluntary redress fund.
Ofgem Director of Conduct and Enforcement Anthony Pygram stated that the default tariff should not exceed the price cap. iSupply senior staff knew that their default tariff consumers were being overcharged back in January 2019, but they gave no refund or made reports about the issue to Ofgem promptly.
A whistleblower approached Ofgem in August 2019 along with credible proof, supplementing the agency’s findings and compliance actions regarding the said issue.
Program further said that Ofgem’s action is a message to other suppliers regarding their customer service efforts. Every supplier must provide fair treatment and address matters quickly to protect the consumers, or they will face the consequence.
Ofgem decided to take no formal enforcement implementation after it has considered the measures iSupply took to address the non-compliance and the agreement to pay the redress.
The regulator monitors the supplier’s conduct closely, including the observance of the price cap. Pygram cautions that if a licensee breached any rule, it has to let Ofgem know and promptly make it right for the customers.
iSupply issued a statement regarding its engagement with Ofgem to resolve the issue. The company has confirmed its failure to fulfill obligations to consumers concerning the price cap.
The supplier acknowledged the lack of governance and reliable processes, which resulted in the overcharging of around 4,400 default tariff customers from January to March of 2019. These accounts were overcharged for the first Charge Restriction Period amounting to £36,270. Another 25 default tariff customers were overcharged on the second Charge Restriction Period from April to September of 2019 amounting to £53.
The said discrepancies were corrected between October and November of this year.
iSupply fully acknowledged its failings, recognizing the company’s breach of SLC28AD and SLC0. It pointed out that the senior staff knew about the violation but made no immediate action to rectify the situation. It also mentioned its failure to treat the customers fairly since it did not give refunds or correct the member’s tariffs directly.
The discovery of its failure to implement the proper tariff has urged iSupply to work hard in transforming its compliance capabilities to prevent any similar incident from happening again. The company has grown its industry knowledge and experiences, and also developed its skills-base. It also granted its team with the tools and authority to make its compliance capability more effective.
Moreover, the company has also invested in resources to key business areas and reinforced the leadership team to better its oversight and support. The investment shows the company’s commitment to serving consumers. It cited the favourable ratings it has received in Trustpilot and Citizens Advice during this year.
iSupply expressed its gratitude towards Ofgem for the alternative action and decision not to pursue enforcement activities. The company further stated that the experience had been a learning process, enabling them to be better placed to perform its obligations the right way.