Green Star Energy is to compensate more than 7,000 customers after failing to issue them with welcome packs containing the terms of their supply contract within a reasonable time.
It is the second such case in the space of a year involving the supplier, which will pay a total of £750,000 in redress for its failings.
Under the standard licence conditions, suppliers must provide information which is sufficient to enable customers to make informed choices about their energy supply.
The retailer, which was acquired by Shell in October last year, identified 7,519 customers who had not received welcome packs within a reasonable time and had been on potentially more expensive “deemed tariff” contracts.
Green Star is now in the process of paying compensation of £30 to each affected customer, £225,570 in total, in recognition of poor service and the fact that these customers did not receive welcome packs.
Of these, 2,172 customers had attempted to switch their tariff/supplier before receiving their welcome packs but were unable to do so. The challenger brand is in the process of paying compensation to each such customer individually, being the difference between the deemed tariff the customers were put on by Green Star Energy and the cheapest available tariff on the market.
Furthermore, additional compensation of £4 will be given to the other 5,347 who did not attempt to switch supplier/ tariff, representing the average gain per customer by Green Star.
The energy regulator said it became aware of the issues, relating to the period between August 2018 and February 2019, last August. Ofgem said Green Star was aware of the issue and had previously reviewed its systems and addressed the systemic deficiencies that led to the issues; however, Green Star Energy had not reported the matter to Ofgem nor had it taken steps to compensate the affected customers.
Ofgem has intervened four times over compliance engagement issues with Green Star since March 2018, including one regarding an identical issue, at the same time as this issue was ongoing.
As a result of the licence breaches, the total redress is £750,000. This includes a voluntary contribution of £389,849 to the Energy Industry Voluntary Redress Scheme.
In July last year, it was revealed that the supplier was to pay £350,000 after more than 1,800 of its customers were left unable to access their accounts and cheaper tariffs. Furthermore, in September 2018, Green Star paid £679,283 in compensation and payments to the consumer redress fund after mis-selling to customers and failing to provide annual statements.