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Scottish Power handed sales ban

Big Six energy provider Scottish Power has been banned from proactive sales for 12 days after failing to meet customer service targets set by Ofgem.

The Spanish-owned firm signed up to the targets in November after the regulator identified customers experiencing long call waiting times and late bills, and that it was not implementing decisions by the industry ombudsman.

It was given three months to meet the commitments and has achieved those relating to call waiting times - which have fallen to less than two minutes - and late bills - down from 75,000 to less than 25,000 - but failed on resolving ombudsman rulings.

Sarah Harrison, Ofgem's senior partner for enforcement, said: "A sales ban illustrates the difficulties Scottish Power is having delivering the levels of service customers deserve.

"While Ofgem's targets have driven significant improvements on Scottish Power's performance, we remain very concerned about how customers are being treated."

Scottish Power had been ordered to remove its backlog for acting on ombudsman decisions for individual complaints by the end of November.

Ofgem said it had been told by the firm that this target was met in December and that this was confirmed by the ombudsman.

But in January the regulator said it "uncovered new evidence that showed the company had not fully met its November target". The ombudsman has now found that Scottish Power fell short of the target by 30.

The backlog of complaints means that more than 2,000 customers are currently receiving free energy from Scottish Power.

It has struggled with transferring to a new £200 million IT system and in cases where this means it has not yet been able to resolve ombudsman decisions fully, it has been providing the free service and writing off past debt.

Ofgem said: "Scottish Power will continue to honour this commitment until the underlying root cause affecting the account is fixed."

The regulator added that, as well as its ongoing investigation, it would require Scottish Power to undertake an independent audit of its progress on improving customer service, and that it would keep the need for any further action under review.

It had ordered the firm to take action last year after identifying problems including lengthy telephone waiting times for customers which led to a quarter of calls being abandoned.

Neil Clitheroe, chief executive of Scottish Power retail and generation, said today: "Scottish Power is committed to delivering the best service possible and treating our customers fairly.

"We have a long track record of delivering high standards of service to our customers.

"The process of moving to our new system has been challenging and has resulted in service problems for some of our customers.

"We are determined to put this right. We continue to correct problems, pay appropriate compensation and ensure no customer is left financially disadvantaged."

Mr Clitheroe said the firm had cleared 2,575 ombudsman cases during November and the ombudsman confirmed its backlog had been cleared on December 1.

"However, subsequently it was identified that 30 cases had been closed incorrectly. We sincerely apologise to these customers for these errors. The cases were immediately fixed on discovery."

The firm is now stopping proactive selling from March 4 until March 15, with more than 500 sales advisers to spend the period "supporting our customer service teams across the UK".

Last month, Scottish Power said underlying earnings from its combined generation and supply business rose 35% to £368.3 million for 2014 as it benefited from lower prices of the coal and gas which fire its power stations.

It has also recently cut gas tariffs by 4.8% amid pressure on the Big Six which saw all of the firms announce reductions as they were urged to pass on the fall in wholesale gas prices to customers.

Scottish Power has around 5.6 million gas and electricity customer accounts serving 3.2 million customers.

Ann Robinson, director of consumer policy at comparison site uSwitch.com, said: "Today's announcement shows tough action by Ofgem and should serve as a warning to the industry that customers must be treated fairly.

"It's encouraging to see that Scottish Power has made significant progress in resolving its customer service issues.

"It has reduced the number of overdue bills, increased the speed which it answers calls and has offered free energy to affected customers - but there is still more to do.

"With trust in energy companies still at an all-time low, all suppliers should give consumers the quality of service they deserve."

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