SSE will pay £1 million to Ofgem’s consumer redress fund after the energy company sent 580,000 pre-payment customers “inaccurate and misleading” information in their annual statements between 2014/2015.
The supplier said it “deeply regrets” the historic issues related to pre-payment meter (PPM) processes, caused by a coding issue.
Ofgem launched an investigation into SSE in November last year, after the supplier reported the issue to the regulator.
It found SSE sent out 1.15 million annual statements to 580,000 PPM customers between June 2014 and September 2015.
The letters contained “inaccurate” information on the alternative cheaper tariffs available for customers if they swapped to a credit meter and paying by direct debit.
An IT coding error resulted in inaccurate estimates of how much customers could save by switching to alternative tariffs.
Some statements also overestimated the annual savings the customers could make by changing their pre-payment meter to a standard credit meter paying by direct debit, as well as by moving to paperless billing.
Ofgem said its investigation found that despite the large number of incorrect statements issued to customers, “only a small proportion” would have acted on the information. It said the level of harm to customers was “low”.
SSE failed to “act promptly to put things right”, Ofgem said, but the regulator has now closed the case and has decided not to take formal enforcement action against SSE.
The supplier has since improved its processes, which includes extra checks on communications before they are sent out to customers.
Gareth Wood, director of customer service operations at SSE, said: “We deeply regret the historic problems we identified with some annual statements for pre-payment customers, relating to a coding issue between 2014 and 2015.
“We proactively reported this to Ofgem once we became aware and, as Ofgem has recognised, we’ve put things right and now have stronger measures in place to help ensure it doesn’t happen again.”
He added: “Although we’re disappointed not to have met the high standards expected of us in this instance, we’re pleased that the matter has now been closed with a voluntary payment that will directly benefit vulnerable customers.”
The £1 million will be used by Ofgem to support consumers in vulnerable situations and to develop new products or services.