Energy Supplier iSupply to pay £1.5 million for Priority Service Register and charging failings

Multiple Failings

What is the Priority Service Register (PSR)?

The PSR is a free service provided by energy suppliers and network operators to customers in vulnerable situations.

A customer can sign up to the register if they are:

• Of pensionable age (currently 65 or over)
• Are disabled or suffer from a chronic illness
• Have a long-term medical condition
• Have a hearing or visual impairment or additional communication needs
• Are in a vulnerable situation including customers with certain mental health issues that may impact their understanding of their energy bills
• Customers who are unable to top-up a prepayment meter due to an injury
• Temporary circumstances where they may need extra support
• Families with children 5 years old or younger

Read more: Add your customers to the Priority Service Register with Dyball’s CRM

Other Failings

According to the energy regulator Ofgem, the failings were reported to have occurred between 2013 and 2019 and impacted over 115,000 customers.

Ofgem also revealed that whilst carrying out its compliance work it found that iSupply were incorrectly charging for contract renewals and were using incorrect VAT rates on certain charges levied to customers.

Other failings recorded by Ofgem included:

• Incorrect charges applied during contract renewals: iSupply failed to maintain some customers’ existing tariff rates when switching to a different supplier or iSupply tariff following a price rise notification or the end of a fixed-term tariff
• Incorrect VAT application: iSupply applied incorrect VAT rates to certain charges levied on customers.
• Incorrect cheapest tariff messages appearing on customer communications
• Incorrect recording of customer status: affecting the Priority Service Register and vulnerable customers
• Misallocation of payments: several customer payments were allocated to the wrong accounts

“iSupply had insufficient governance and processes in place to prevent and swiftly address non-compliance, which resulted in a range of issues that ultimately caused consumer harm,” said Ofgem in its report.

The £1.5 million redress package is broken down into the following:

• Direct customer refunds worth £809,220.41
• Voluntary Redress fund payment worth £95,489.59
• Customer goodwill payments totalling £595,290

iSupply’s parent company reached a deal to transfer their energy contracts to EDF.

Improvements made

“iSupply Energy always endeavours to act with our customers’ best interests in mind. Earlier this year we identified shortfalls in our service levels and worked hard to put this right for impacted customers. We recognised the seriousness of this situation and agreed with Ofgem to pay £95,489.59 in the Energy Industry Voluntary Redress Scheme.

We’d like to offer assurances that all affected customers have been reimbursed with any detriment and a goodwill gesture offered, along with a full and sincere apology. The maturity of our compliance capability has grown over time with investment in training, resources, and governance. Our leadership team continues to focus on ensuring management of our customer accounts is in line with Ofgem’s license conditions until the customer migration to EDF is concluded in a few weeks,” said an iSupply spokesperson. 

A lesson for Energy Suppliers

To avoid committing the same regulatory mistakes and failings as iSupply energy suppliers should seek out the advice and expertise of our managed services team.

Dyball Associates Managed Service team has an outstanding reputation in the energy supply industry and we currently handle data quality and industry dataflow processing for over 1.5 million-meter points. Each energy supplier is assigned a dedicated point of contact and work routines from the Market Messaging Systems are handled on a daily, weekly, or monthly basis, as required. 

Click here to find out more.

Energy suppliers should have robust risk management and governance processes in place that allow them to anticipate, escalate and mitigate the risk of any harm to the consumer. Suppliers also need to have systems in place that allow them to make fixes quickly and easily to systems and processes instead of relying on slow moving manual workarounds. Dyball’s CRM system for example. 

Further Reading

Electricity Switching down 15% year on year in May and SSE reports drop in profits

Challenger Energy Suppliers should improve their mobile experiences says new report

Feed in Tariff costs could soar to record highs due to Covid-19 and exceptional weather conditions

Dyball Associates are proud to help new supply businesses successfully launch in the UK market.

Through our energy market consultancy services, and the software we’ve developed, we’re supporting new UK electricity and gas suppliers get set up and start supplying.

For more information on how to start and manage an energy company, get in touch with Dyball Associates today.