Shell Energy Retail is to refund and compensate 12,000 customers it overcharged when the price cap was introduced.
The price cap on expensive default tariffs was introduced on the 1st of January 2019 – however, Ofgem found that between January and March, Shell Energy Retail overcharged these customers a collective £100,736.63 above the level of the price cap.
In addition to returning this money, the supplier will pay £200,000 to Ofgem’s consumer redress fund, equating to a total payment of £390,000 – the redress fund is used to help support vulnerable customers across the UK.
The supplier was trading under the First Utility name at the time of the breach.
Around 6,200 Shell Energy Retail customer accounts were on tariffs that were above the level of the price cap, while the remaining 5,600 customer accounts experienced a delay in their energy price being reduced after they requested to change to a cheaper means of paying for their energy.
Ofgem has decided not to take formal enforcement action but notes it will “continue to hold suppliers to account” if they do not meet their obligations.
Colin Crooks, CEO of Shell Energy Retail said: “We’d like to apologise to all customers who were temporarily out of pocket. For the vast majority of our customers we implemented the cap in line with Ofgem’s licence conditions. We had a small number of customers on fixed-price default tariffs to whom we didn’t apply the capped rates because most of these customers would have been better off remaining on their existing tariff.
“However, we recognise that there were some who would have been better off on the capped rates or who suffered a delay in changing their payment method. We always intended to re-credit these customers, which we are now doing together with a compensation payment and have agreed to pay into the Ofgem redress fund.”