Energy giant EDF to pay out £3million for keeping customers on the line for hours as they tried to make complaints

  • Regulator said complaints rose by 30% when new IT system installed in 2011
  • But EDF did not have appropriate procedures in place to handle the influx
  • Customers waited 'unacceptably' long time with call centre - many hung up
  • £3m payout in lieu of a fine will go to Citizens' Advice Bureau to help others 

By Dan Bloom for MailOnline

Published: | Updated:

Payout: EDF will pay £3million after a new IT system wreaked havoc with its complaints prodecures

Payout: EDF will pay £3million after a new IT system wreaked havoc with its complaints prodecures

Big Six energy giant EDF is paying out £3million to 'vulnerable customers' after a watchdog found it did not cope well enough with a huge surge of complaints.

Gripes with the French-owned firm jumped more then 30 per cent when it was in the throes of introducing a new IT system in 2011.

But frustrated customers faced 'unacceptably high' waiting times when they rang the company's call centre, the regulator Ofgem said.

Many were not recorded properly on the system, while others gave up and hung up.

Today's payout - which Ofgem agreed with EDF instead of a fine - will not be paid directly to customers because it was difficult to establish who was affected or how much money they lost.

Instead the £3million will go to the Citizens' Advice Bureau's debt helpline, based in Plymouth, and the charity's Energy Best Deal Extra scheme to help other customers in future.

Ofgem's investigation found that between May 2011 and January 2012, EDF Energy did not have appropriate procedures in place to properly receive, record and process all customers’ complaints.

When callers eventually got through, there was evidence that the supplier failed to record all the required details for the complaints received.

These included the date of receipt and a summary of the complaint and action taken, without which it was difficult to track complaints' progress.

At times when the new systems were down, complaints were not logged until some time after they were received. 

But the regulator added that staff at the energy company took action quickly to rectify the problems and to mitigate the effects on consumers.

Sarah Harrison, Ofgem’s senior partner with responsibility for enforcement, said: 'EDF Energy failed to have sufficiently robust processes in place when they introduced a new IT system and this led to the unacceptable handling of complaints.

'Their commitment to putting things right and paying £3million to the Citizens Advice Energy Best Deal Extra scheme and the Plymouth Citizen Advice Bureau’s Debt Helpline to benefit vulnerable customers is a step in the right direction to rebuilding consumer trust.'

Fury: Many customers hung up and others did not have details recorded on the system (photo posed by model)

Fury: Many customers hung up and others did not have details recorded on the system (photo posed by model)

An EDF spokesman said the errors happened during an 18-month transfer onto the new IT system 'despite careful planning and investment'.

The spokesman added: 'As soon as the problems emerged, following a number of unforeseen technical system problems, EDF Energy suspended the transfer of customer accounts into the new system.

MOST COMPLAINED ABOUT TITLE NOW GOES TO NPOWER, NOT EDF 

Research in May found EDF was the third-most complained about Big Six firm, receiving 62 for every 100,000 customers, 

The most complaints went to German-owned npower, which imposed the highest price hike last winter and received ten times as many complaints as its best performing rival.

Data from the Citizens Advice Bureau showed that, between October and December last year, npower was inundated with 306 complaints for every 100,000 customers.

That was three times as many as Scottish Power, which attracted 100.5 complaints per 100,000 customers.

E.ON came fourth with 55.8, British Gas was fifth with 53.7 and Scottish and Southern Energy was the best performing of the firms with 31.5.

'Actions were taken to resolve these technical problems and hundreds of additional staff were recruited to restore service levels. 

'EDF Energy has publicly acknowledged that the service to customers was not acceptable through this period and has co-operated fully with Ofgem throughout the investigation.'

The payout follows Ofgem's announcement in June that a full investigation would be held into the Big Six after their retail profits quadrupled to £1.1billion in three years.

The firms, which dominate the energy market, are British Gas, SSE, E.ON, EDF, npower and Scottish Power.

The Competition and Markets Authority (CMA) inquiry, expected to take around 18 months, will look at the relationship between the supply businesses and generation arms of the six firms.

The number of customers switching suppliers has fallen in recent years and 43 per cent of people say they do not trust energy suppliers to be open and transparent, according to Ofgem.

EDF managing director Beatrice Bigois said: 'Despite our best efforts and extensive planning to manage this transition in 2011 without impacting our customers, we recognise that for a period of time the service to our customers was not up to the standards they deserve. We apologise to those customers who were impacted during this period.

'We have cooperated fully with Ofgem and have taken this matter very seriously.

'The £3m package that we are offering will ensure that thousands of vulnerable customers are provided with free, independent advice on debt, as well as information to help them manage their energy consumption and bills.' 

OTHER MAJOR ENERGY FIRMS WHICH HAVE FACED SANCTIONS RECENTLY

E.ON

The firm agreed to pay £12million to vulnerable customers in May after Ofgem's investigation found it had broken energy sales rules between 2010 and 2013.

E.ON also committed to compensating any customer that it mis-sold to, including automatic payments to some vulnerable customers.  

Scottish and Southern Energy 

SSE was fined £10.5million in May 2013 for numerous breaches of its obligations relating to telephone, in-store and doorstep sales activities.

Ofgem found failings at all stages of SSE's sales processes, from the opening lines on the doorstep, in-store or over the phone through to the confirmation process which follows a sale. 

After a probe into how it handled last winter's storms, which saw a million homes lose power, SSE paid out £4.6million this summer. 

This included £2.3million in guaranteed standards and goodwill payments and £2.3million to the British Red Cross, Age UK, National Energy Action, Macmillan Cancer Support, and to a new community fund.

Scottish Power

In May, Scottish Power agreed to pay £750,000 to Energy Best Deal following Ofgem's investigation into price differences between its standard credit and direct debit tariffs.

Under Ofgem rules, suppliers can only have different prices for different payment methods if the amount reflects the costs involved in supplying those accounts. These rules are designed to protect consumers and take into account that some payment methods are more expensive to administer than others.

Ofgem's investigation found that between, September 2009 and December 2012, Scottish Power did not have a robust process in place to assess the costs associated with different payment types and set prices accordingly. 

British Gas

In April, Ofgem's investigations found that British Gas Business had incorrectly blocked business customers from switching to other suppliers and failed to notify customers when their contract was due to expire. In recognition of these failures, British Gas Business was set to pay £5.6 million in redress and penalty.

In July, Ofgem secured a £1million package from British Gas after they mis-sold to customers in Sainsbury's stores nationwide and in Westfield shopping centre, Shepherds Bush, west London.

npower

In December last year, npower agreed to pay a £3.5million package to help vulnerable consumers following an investigation which found it had breached marketing licence conditions.

Ofgem's investigation centred on the sales processes and information used by npower when customers were making decisions about whether to switch supplies to them. 

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