Consumer Focus Wales, the consumer watchdog, welcomes npower’s announcement today (Fri 1 Oct) to refund customers who overpaid for gas in 2007. Consumer Focus Wales has worked with npower to achieve the right outcome for its customers.
In 2007 npower changed the way it applied its charges for the first block of higher-priced gas units which households pay, but this change was not communicated effectively to customers. An estimated 1.8 million customers are likely to have paid for more of these higher-priced units than they expected to pay.1
In February 2009, following an Ofgem investigation, npower repaid an average £6 to 200,000 of its customers (£1.2million). Consumer Focus Wales and many customers thought this did not fully reimburse all those people who paid more for their gas because of the change, and pursued further discussions with npower.
npower has thoroughly reviewed its customers’ billing records, working closely with teams from Consumer Focus, to ensure a fair amount is paid back which covers the overpayments in 2007. The average payment is £35, excluding VAT and interest. This offers refunds of £63 million for gas payments plus VAT and interest.2
Maria Battle, Senior Director of Consumer Focus Wales, said:
‘Consumers have been waiting a long time for this announcement and we are pleased with the final result. Sixty three million pounds plus VAT and interest for consumers across the UK, including millions for consumers here in Wales, is an excellent outcome and shows a major commitment from npower to its customers.
‘Our investigation team, based here in Wales have worked closely with npower to ensure that refunds are made fairly and that no customer loses out. A huge amount of work and collaboration has resulted in the right thing being done by npower for its customers and we welcome this. It has been a great example of how consumer organisations can work with industry to deliver a fair deal for consumers.’
Customers do not need to do anything to claim these payments. npower will be writing to all affected customers over the next two months, offering payment that can be cashed at the Post Office. Consumer Focus Wales would encourage customers to take advantage of this refund. If customers have further questions regarding the payment, or believe they may be entitled to a refund but have not been contacted by the end of November, they should call npower’s helpline on 0800 975 7938 (this helpline is open from Monday 4 October). Consumers can find further information about the payments at www.consumerfocus.org.uk
Notes to editors:
- Around 1.8 million people in the UK who were npower gas customers in 2007 were affected. The amount of payment customers will be entitled to will vary by tariff, gas consumption, and the time at which they became an npower customer.
Customers who were on the following tariffs / payment types were not affected by the overpayments will not be entitled to refunds; electricity customers (the issue was gas specific), business customers, gas pre-payment meter customers; any customer who was on Gas guardian tariff; 2009 Price Fix tariff; Tracker Tariff; 1st steps (social tariff); or Sign Online 8 tariff.
- For those customers entitled to payments, these will range from £1 up to about £100. The average payment will be around £35 before VAT and interest are added. The combined payments offered will consist of £63m for gas charges plus £3m in VAT and £4m in interest.
- Consumer Focus Wales is the independent champion for consumers in Wales. Consumer Focus gives a strong voice for consumers on the issues that matter to them and works to secure a fair deal on their behalf. We operate across the whole of the economy, persuading businesses, public services and policy makers to put consumers at the heart of what they do.