IT system problems were behind Npower’s failure to treat customers fairly on billing and the handling of complaints.
When it comes to debt recovery, the importance of keeping adequate records about clients and customers cannot be overstated. Recording bills that have and have not been paid is one of the basics of accounting in business, however a lot can go wrong when this process is automated and processes are not put in place to handle accounts directly.
The case of Npower recently shows how errors in the handling of accounts can result in huge financial losses when customers begin to complain and regulators get involved.
Npower was fined £26 million as a result of its IT system failing to calculate bills accurately leading to some customers being over charged and others receiving a refund of what they had already paid with no explanation as to why this had occurred.
The problem affected half a million customers over a period of more than 12 months from September 2013 and December 2014. This resulted in a two million complaints and the loss of 200,000 customers.
How customer complaints were handled including debt collection practices used by the company meant that the regulator had no choice other than to fine the energy company. Npower follows E.On’s fine of £12 million for misspelling energy in 2014.