{"id":36370,"date":"2023-11-21T07:08:19","date_gmt":"2023-11-21T07:08:19","guid":{"rendered":"https:\/\/www.ispreview.co.uk\/?p=36370"},"modified":"2023-11-21T07:29:14","modified_gmt":"2023-11-21T07:29:14","slug":"ofcom-uk-fines-shell-energy-1-4m-for-broadband-contract-failings","status":"publish","type":"post","link":"https:\/\/www.ispreview.co.uk\/index.php\/2023\/11\/ofcom-uk-fines-shell-energy-1-4m-for-broadband-contract-failings.html","title":{"rendered":"Ofcom UK Fines Shell Energy \u00a31.4m for Broadband Contract Failings"},"content":{"rendered":"<p>Broadband ISP, phone and energy provider Shell Energy, which is in the process of being sold to the Octopus Energy Group (<a href=\"https:\/\/www.ispreview.co.uk\/index.php\/2023\/09\/isp-and-utility-firm-shell-energy-uk-acquired-by-octopus-energy.html\">here<\/a>), has today been fined \u00a31.4m by <a href=\"https:\/\/www.ispreview.co.uk\/index.php\/link\/ofcom\" target=\"_blank\">Ofcom<\/a> for &#8220;<em>not properly prompting more than 70,000 phone and broadband customers<\/em>&#8221; to review their contract or informing them of the best deals.<!--more--><\/p>\n<p>The regulator\u2019s <a href=\"https:\/\/www.ispreview.co.uk\/index.php\/2020\/02\/end-of-contract-letters-to-start-for-uk-broadband-isps-and-mobile.html\"><strong>End-of-Contract Notifications<\/strong><\/a> (ECN) system \u2013 as introduced in February 2020 \u2013 requires all fixed broadband, mobile, home phone and pay TV providers to issue such notifications to existing subscribers at the end of their term (sent by text, email or letter). The move was intended to help tackle the so-called \u201c<em>loyalty penalty<\/em>\u201d by keeping customers informed about the best deals and encouraging switching.<\/p>\n<p>In the case of Shell Energy, <a href=\"https:\/\/www.ispreview.co.uk\/index.php\/link\/ofcom\" target=\"_blank\">Ofcom<\/a> has been investigating them since April 2022 (<a href=\"https:\/\/www.ispreview.co.uk\/index.php\/2022\/04\/ofcom-probes-shell-energy-over-missing-end-of-contract-letters.html\">here<\/a>), when the provider itself notified the regulator that it \u201c<em>did not send these notifications to some customers for a period of time starting in February 2021<\/em>\u201c, while other customer letters may not have contained all of the required information.<\/p>\n<p>The <a href=\"https:\/\/www.ofcom.org.uk\/about-ofcom\/bulletins\/enforcement-bulletin\/open-cases\/cw_01259\" target=\"_blank\" rel=\"noopener\">regulator&#8217;s investigation<\/a> has today confirmed that &#8220;<em>the company broke important consumer protection rules<\/em>&#8221; and, in some cases, &#8220;<em>failed<\/em>&#8221; to send out end-of-contract notifications and annual best tariff notifications at all. In other cases, customers were issued with notifications that &#8220;<em>included inaccurate or incomplete information<\/em>&#8220;. This was caused by a &#8220;<em>combination of manual errors and systems and process failures<\/em>&#8221; at Shell Energy.<\/p>\n<p>Specifically, <a href=\"https:\/\/www.ispreview.co.uk\/index.php\/link\/ofcom\" target=\"_blank\">Ofcom<\/a> found that 72,837 customers were affected by Shell Energy\u2019s failures between March 2020 and June 2022. Notably, 7,750 customers received an end-of-contract notification that contained incorrect information about the price they would pay once their minimum term period came to an end. Of these customers, 6,054 went on to pay higher charges than they were originally quoted, collectively amounting to \u00a3398,417.67 &#8211; an average of \u00a365.81 each.<\/p>\n<blockquote class=\"bq1\"><p><strong>Suzanne Cater, Enforcement Director at Ofcom, said:<\/strong><\/p>\n<p>\u201cEvery day tens of thousands of customers come to the end of their phone or broadband contract and can make significant savings by switching provider or signing up to a better deal. That\u2019s why our rules, which demand that providers prompt customers with the information they need to take action, are so important.<\/p>\n<p>Shell Energy\u2019s failings represent a serious breach of our consumer protection rules and they must now pay the price. This sends a message to the whole industry that we won\u2019t hesitate to step in on behalf of customers if they don\u2019t play by the book.\u201d<\/p><\/blockquote>\n<p>The company is said to have improved their systems, processes and &#8220;<em>moved quickly to refund affected customers<\/em>&#8220;, although they decided not to automatically issue refunds lower than \u00a33 to ex-customers (possibly due to the admin costs in confirming and processing them), and in lieu of this, have donated an equivalent amount to charity \u2013 this amount includes unclaimed refunds. But Ofcom has required Shell Energy to make refunds available to these customers should they request it.<\/p>\n<p>In terms of the \u00a31.4m fine, which is payable to <strong>HM Treasury<\/strong> within four weeks, this penalty includes a 30% discount from the amount Ofcom would otherwise have imposed following Shell Energy\u2019s admission of liability and agreement to enter into their settlement process.<\/p>\n<p>However, in somewhat of a warning to other providers, Ofcom notes that Shell&#8217;s fine &#8220;<em>would have been significantly higher had Shell Energy not self-reported the contravention, co-operated closely with our investigation and proactively taken steps to remedy the breaches following discovery of the issue<\/em>.&#8221;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Broadband ISP, phone and energy provider Shell Energy, which is in the process of being sold to the Octopus Energy Group (here), has today been fined \u00a31.4m by Ofcom for &#8220;not properly prompting more than 70,000 phone and broadband customers&#8221; to review their contract or informing them of the best deals.<\/p>\n","protected":false},"author":1,"featured_media":33301,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"ngg_post_thumbnail":0,"footnotes":""},"categories":[1],"tags":[36],"class_list":["post-36370","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uk_isp_news","tag-ofcom-regulation"],"share_on_mastodon":{"url":"https:\/\/mastodon.social\/@ispreview\/111447284307069677","error":""},"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.8 - 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