OFGEM SSE compensates customers £190,000 (7960S)

TIDMSSE

RNS Number : 7960S

OFGEM

28 June 2018

SSE compensates customers GBP190,000 due to delayed switch

-- SSE has paid GBP190,000 in compensation to customers after withdrawing a 'white label' partnership tariff with Ebico

-- SSE took almost 6 months to switch customers onto a new tariff, with some losing savings because of the delayed switch

-- A new 'white label' partnership between Robin Hood Energy and Ebico also initially set out to switch these customers without their consent.

SSE has paid GBP190,000 in compensation to customers over failures following its withdrawal of a 'white label' partnership tariff with Ebico, the social enterprise.

At the end of 2016 Ebico terminated its partnership with SSE. In February 2017, SSE withdrew the white label tariff with Ebico from the market.

Suppliers have 49 days to move customers onto another tariff when a tariff is withdrawn from the market. SSE took almost six months, failing to comply with its licence, in part while it considered other options for their customers.(1)

Some customers who were switched ended up on a cheaper tariff, but lost money they would have saved due to the delayed switch. SSE paid GBP190,000 to these customers to compensate for this delay.

Other customers who were switched ended up paying more on the tariff. SSE made a goodwill gesture payment of GBP475,000 to this group of customers.

SSE compensated all affected customers, set up a dedicated customer support team for those querying the compensation value and a support fund for customers requiring further compensation.

Due to the steps SSE has taken in co-operating with Ofgem, contacting and compensating affected customers, Ofgem has not taken formal action against the supplier.

Following the termination of the partnership with SSE, in January 2017 Ebico and Robin Hood Energy, the local authority-owned energy company, entered into a new 'white label' partnership.

Ebico wrote to all the customers of the SSE - Ebico 'white label' tariff that they would be automatically transferred to a better deal with Robin Hood Energy. This would have contravened the supply licence as customers need to give their consent to be switched to another supplier, as they remained customers of SSE.(2)

Ofgem worked with Robin Hood Energy, to make them aware of their licence obligations and responsibilities to allow consumers to make an informed choice. Subsequently, the supplier revised its approach and made customers of the SSE - Ebico 'white label' aware of their option to switch.

Notes to editors

1. Supply Licence Condition 22D (SLC 22D), states that when suppliers remove a tariff from the market, they must migrate customers onto fixed term or evergreen tariffs within 49 days.

2. Supply License Conditions 22 and 25 states that customers need to give their consent to be switched to another licenced supplier.

   3.   Ofgem has published its decision to close this compliance case. 

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June 28, 2018 02:00 ET (06:00 GMT)