Shell has agreed to pay half one million kilos for overcharging hundreds of prepayment meter clients on default tariffs over the previous three years.
The vitality large’s client arm, Shell Vitality Retail, will refund and compensate 11,275 clients after it found that it had despatched the incorrect charges to customers’ meters.
It meant that these clients had been pressured to pay greater than allowed beneath the regulator’s value cap at varied occasions since January 2019.
Prepayment meter customers already pay for his or her vitality at a larger charge and embody a few of the nation’s poorest and most susceptible households. Shell has agreed to routinely refund overcharged clients the £106,000 they’re owed in whole, pay £400,000 into Ofgem’s client redress fund, and make an additional £30,970 in additional “goodwill funds” to affected clients.
The vitality supplier pays a whole of £536,970. Clients are anticipated to obtain refunds price £9.40 every, on common.
A Shell Vitality spokesperson mentioned: “We’re sincerely sorry that errors updating our prepayment meter charges resulted in some clients being overcharged for a time frame. As quickly as we recognized the difficulty we started taking steps to place it proper, and self-reported it to Ofgem.” The corporate mentioned it might be writing to clients to inform them in regards to the funds.
Ofgem mentioned the compensation bundle “would have been significantly larger” had Shell not self-reported the difficulty and brought steps to deal with the downside. The regulator additionally thought of the extra monetary hardship that the difficulty can have positioned on prepayment clients, particularly when vitality costs have risen to historic highs.
The regulator’s director of retail, Neil Lawrence, mentioned: “Ofgem expects suppliers to stick to the phrases of contracts they’ve with clients, notably guaranteeing they pay not more than the extent of the worth cap.
“Households throughout Britain are already scuffling with rising vitality payments and residing prices,” he added. “Overcharging by suppliers may cause further and pointless stress and fear at what’s already a really difficult time for customers throughout the UK.”
It’s the second time the corporate has breached the worth cap because it was launched, having been pressured in 2019 to compensate 12,000 clients whom it overcharged when the corporate was nonetheless buying and selling beneath the First Utility model. Shell purchased the corporate in 2018.
“Ofgem is at all times ready to work with suppliers who’ve did not adjust to their obligations, however who’ve self-reported and are decided to place issues proper, as Shell has finished right here,” Lawrence added. “The contributions Shell has made to the redress fund will assist to help susceptible customers with their vitality payments.”