Co-operative Energy to pay £1.8million back to customers due to problems with bills and complaints

CO-OPERATIVE Energy is paying out £1.8 million to customers after bills were delayed and online accounts blocked.

The company, which is a smaller energy firm, has already paid most of the compensation after around 260,000 customers were affected by a new IT system in March last year.

The system's introduction led to direct debits being blocked and lengthy waits for new customers.

Ofgem said Co-operative Energy let customers down over how it dealt with complaints, call handling and billing processes.

The regulator and Citizens Advice saw a steep increase in complaints after customers were unable to log into their accounts online - leaving them unable to submit meter readings or check their bill.

Bills were delayed and direct debit updates stopped, and new customers also experienced delay transferring to the supplier.

Ofgem said Co-operative also took too long to resolve a significant number of customer complaints.

Co-operative has already paid out £1.6 million, and any amount it cannot return will go to the charity StepChange to help energy consumers who are in financial difficulties.

They have also stopped marketing their products and improved the service.

The company, who increased prices for both gas and electricity by three per cent at the start of the month, also apologised to customers.

Ofgem senior partner Martin Crouch said: "While customers experienced unacceptable levels of service, Co-operative Energy has done the right thing by taking responsibility for the situation and paying out compensation to those people affected.

"If trust is to be restored in the energy market suppliers must make amends to their customers when things go wrong. We want all suppliers to constantly ensure customers are treated fairly."

Ben Reid, chief executive of Midcounties Co-operative which runs Co-op Energy. said: "As the UK's only member-owned energy supplier, we put our customers at the heart of everything we do and their interests first.

"We have apologised to those customers who were affected by the problems we experienced when we introduced a new IT system last year. The system issues are now resolved and we have made significant improvements to our service."

The news comes just one day after Vodafone were charged £4.6 million for breaking customer rules.

The phone giant had also broken rules on handling customer complaints.

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