ScottishPower has agreed to pay £18 million for failing to treat its customers fairly.
It follows an investigation by Ofgem into the Big Six supplier’s complaint resolution, call handling and billing processes, which were found to be “inadequate”.
The energy firm’s customer service issues, during and following its new IT system, resulted in more than one million complaints between June 2013 and December 2015, according to Ofgem.
Thousands of Ombudsman ruling were not implemented within the required 28 days and ScottishPower had insufficient contingency plans and didn’t do enough to protect its customers from issues that arose as a result of the new system, it added.
The investigation also revealed many customers experienced “unacceptably long” call waiting times with many calling multiple times and hanging up before getting through.
More than 300,000 customers also received late final bills, which meant some of them did not receive money they were owed promptly.
However Ofgem said ScottishPower has improved its customer service since the investigation, with the number of late bills falling by 75%.
Dermot Nolan, Ofgem Chief Executive added: “ScottishPower let its customers down during the implementation of a new IT system. When things went wrong, it didn’t act quickly enough to fix them. This created frustration and worry for many customers, who also wasted a lot of time trying to contact the supplier by phone.
“The £18m payment sends a strong message to all energy companies about the importance of treating consumers well at all times, including while new systems are put in place.”
Up to £15 million of the fine will be paid to vulnerable customers who were affected while the rest will go to charity.
Neil Clitheroe, ScottishPower’s CEO of Energy Retail and Generation said he “apologises unreservedly” to those customers affected.
He added: “I gave a guarantee that no customer would be left out of pocket by these issues and we continue to compensate customers who have been affected. Additional customer service advisors were added and we extended our opening hours to the longest in the industry in order to improve our customer service levels.
“With our new IT system now fully in place, our service performance has significantly improved and customers will start to see real benefits in managing their accounts. Newly developed digital services have been launched, such as online payment adjustments and refunds, which would not have been possible on our old system.”
Last week ScottishPower was accused of a “cover up” by a group of MPs for allegedly failing to pay out £75 million to customers under a previous warranty scheme.