22,671 complaints in the six months to July 2014 compared to 10,598 in the last six months of 2013 and already eclipsing 17,960 the total number of complaints received in the whole of 2013.
By any objective measure that is a big increase.
We’ve talked before about statistics not always backing up the true facts but even the most optimistic observer would have to admit something is seriously awry in the customer service departments of the Big 6 energy suppliers.
But those figures aren’t even the total number of people complaining to their energy supplier, they’re just the number of people who have complained so hard and for so long that their complaint has been referred to the Energy Ombudsman to arbitrate.
We have talked already of the higher profile of the energy industry potentially increasing the propensity for complaints and Ombudsman themselves have echoed this.
Chief Energy Ombudsman Lewis Shand Smith said:
“The spike in complaints is in part a result of the rising cost of living, but also as a result of consumers becoming more aware of their rights and feeling more empowered to act and fight for a fair deal. Addressing these concerns is crucial to restoring consumer confidence in the sector.”
But there can be no doubt that the underlying problems are very real:
- 84% of complaints were about billing issues
- 13% of complaints were about switching supplier
- 113% was the increase in complaints compared to H2 2013
- 216% was the increase in complaints in June 2014 compared to June 2013
Energy UK, the energy supplier trade body, responded to the figures saying:
“The energy industry works hard to provide the best service for its customers but in an industry serving 27 million sometimes things go wrong.
“However no one wants to see complaints rise and each complaint is taken very seriously with companies working hard and investing in resources and new systems to resolve issues as quickly as possible.
“Most complaints are dealt with by the end of the next working day with no more than a phone call.”
Energy UK added that they would look into why some complaints could not be resolved in such timescales and how they were going to tackle the issues by announcing:
“The industry will be consulting stakeholders this summer about the complaints it cannot fix in 48 hours.
The spokesperson also advised customers not to immediately call the Ombudsman in but instead to liaise directly with the supplier to attempt to resolve the issues by saying:
“If any customer is concerned or has a problem with their energy supplier they should speak to the companies first.”
But the figures beyond the Ombudsman complaint referrals look even more daunting.
nPower, already under notice from Ofgem that they face a ban on taking on new customers if their issues aren’t resolved by August, have posted another huge increase in complaints.
In the first quarter of 2014, 1 in every 169 nPower customers complained about their service, the increase since Q4 2013 was astonishing from 307 complaints per 100,000 customers to 592.
But it is not only nPower who are seeing huge increases in dissatisfied customers with complaints to Scottish Power increasing from 100 per 100,000 customers to 198 over the same period.
Unsurprisingly both nPower (6th) and Scottish Power (5th) came bottom of the Citizens Advice complaints league table.
Source: Citizens Advice
Though not perfect the remaining Big 6 suppliers fared far better with no one of them having more than 85 complaints per 100,000 customers. However, given the overall average per 100,000 was 151 it just goes to show how bad a job both Scottish Power and nPower have presided over in 2014.
Both companies blamed “new billing systems” for their problems but given Ofgem have gone on record to question the time it is taking for these systems to ‘bed in’ the excuse is starting to fall on deaf ears with Ofgem describing nPower in particular as suffering from “prolonged customer service failings”,
In a fitting piece of irony Citizens Advice said that the increase in complaints to nPower was because they had overcome billing system issues that prevented bill production and now it was just that the bills were wrong or demanded too high a catch up payment, rather than that they hadn’t been received. Progress of sorts.
Citizens Advice Chief Executive Gillian Guy said:
“The knock-on effect of poor billing systems can turn budgets upside down. Many people do not have the spare cash to cover the cost of a large bill that suddenly lands on their doorstep.
“While we recognise npower is receiving more complaints because it is starting to get over some of the earlier issues, it needs to do more to stop consumers’ problems escalating. Offering repayment plans and discussing ways they can help consumers from the off will nip issues in the bud and remove the need to complain.
“Scottish Power has an opportunity to learn from other suppliers’ new billing system failures and address these problems now so more consumers won’t have cause for complaint.
“A rise in complaints about all suppliers is concerning. Suppliers won’t win the trust of customers back unless they show they understand what consumers need, recognise the financial pressures many people are under and are able to sort out problems quickly. This is something that all suppliers can act on now.”
Npower’s Roger Hattam, responded to another damning report saying:
“Since apologising to our customers in December, we have been working hard to fix our billing system issues – which meant we couldn’t bill groups of customers. These billing issues led to higher than normal complaint levels, as shown by the figures for January to March.
“We recognise we have more work to do but we’re making progress. In June alone we reduced our late bill backlog down to 231,000 customers, received 10% fewer complaints and also cut our complaints backlog by 27%. We’re fixing our billing issues and clearing even more of the backlog of late bills. This, in turn, will reduce the numbers of complaints received by Citizens Advice and the Ombudsman.”
A Scottish Power spokesperson responded by saying:
“We are disappointed that complaints have increased, and we apologise to any customers who have experienced issues.
“Over the last six months we have been installing a new £200 million account management system, which will mean real improvements to our customer service. However, the transition is difficult and has led to a dip in customer service levels. We have, however, recruited hundreds of additional call handling staff and extended our call centre opening hours to the longest in the industry, as well as expanding our online services.
“We are confident customers will see real service improvements coming through.”
DECC chastised the energy suppliers saying:
“It is unacceptable that so many people have needed to complain about their energy suppliers.
“Energy companies need to realise that people will not tolerate poor service and are switching suppliers in unprecedented numbers, particularly to small suppliers whose numbers have nearly trebled since 2010.”
But poor service isn’t just an irritant; it can genuinely put a business at risk.
Take the example of the Langfield Manor Guesthouse in Bude, Cornwall. Since 2007 they have been supplied by nPower, paying by direct debit and submitting regular meter readings, yet in October 2013 they were hit with a bill for £25,300.
The fault? nPower had been reading the 6 digit meter as a 5 digit one and even where the customer provided readings that clearly showed 6 digits, these were disregarded by nPower.
nPower, recognising their culpability, offered to reduce the bill to £14,120 but only after unnecessary wrangling and a move to cut off the guest house’ supply.
But it isn’t only billing errors that damn nPower in this instance. nPower like all energy suppliers cannot back bill for more than six years, indeed nPower tell their customers that they “limit back billing to a maximum of two years” and yet in this instance they did no such thing.
The business owner told the Daily Telegraph:
“When I called npower, they told me that our electricity meter had been misread since we opened the account.
“I had always sent in the correct six-digit readings, but npower said that when my readings reached their office, they ignored the last digit because they had five-digit readings showing on their system.
“The way npower has behaved is inexcusable. We have always acted in good faith and paid our bills on time.”
The Telegraph report that nPower have now reduced the bill to £11,000 and ‘only’ back billed for 3 years, with nPower blaming the meter operator, and not themselves for the error.
And there is the crux of the problem, not taking responsibility; it is difficult not to have some sympathy with Energy UK’s comment that:
“In an industry serving 27 million households sometimes things go wrong”
But as anyone knows, an error doesn’t have to turn into a complaint. It only becomes a complaint when the party who commits the error does not act to resolve it or compounds it by further poor behaviour.
It would seem that is a lesson nPower have yet to learn and it’s already nearly August.