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Re: Overcharging case settled by npower
Overcharging case settled by npower
One customer's landmark victory gives the green light for millions to claim compensation
Mark Atherton
div#related-article-links p a, div#related-article-links p a:visited { color:#06c; } A Times reader has won a landmark battle with npower that could pave the way for millions more customers to obtain compensation for being overcharged by the energy company.
Andy Beck, a semi-retired bathroom installer, from Teignmouth, Devon, learnt last week that npower had agreed to meet in full his claim of £1,375 for overcharging and failing to notify him of changes to the way his gas bill was calculated.
The company says that it paid the claim because of the poor service it had given Mr Beck and because it would have cost more to fight the case than to settle it. If npower had not agreed at the last minute to settle Mr Beck's claim, it would have had to appear in court this week to defend its charging practices.
Before being replaced by Consumer Focus, Energywatch estimated that npower's customers could have been overcharged by as much as £200 million.
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Mr Beck says: “I regard this as a real victory over npower. It tried to fob me off with a sum of £595 as a ‘goodwill gesture', but it finally caved in and paid my claim in full. I believe that many other npower customers are in the same position as me and would have an equally strong claim for compensation.”
Mr Beck's case focused on two distinct points. The first was that, in three different years, he was charged for more units of gas than he should have been at the higher of npower's two rates. The second is that from April 2003, when npower introduced a new two-tier tariff, it broke the terms and conditions of its own contract by failing to notify him fully of price changes and the way that his gas charges were calculated.
Npower's gas tariff is made up of two parts: the primary block of the first 4,572 units supplied each year, which are charged at a higher rate. The remaining units are charged at the lower follow-on rate.
After checking his bills carefully, Mr Beck found that he had been charged for 6,514 units at the higher rate in the 12 months to last April. This was 1,942 units more than the prescribed figure of 4,572. He found that he had also been charged for 13 units too many at the higher rate in 2005-06 and for 898 units too many in 2004-05. Had the extra units been charged at the cheaper rate, his gas bills would have been £102 lower.
Mr Beck also discovered that the energy company had operated a complicated charging structure for its primary block units and also changed the structure on several occasions over the years. At times npower spread the 4,572 units evenly over a full 12 months, so that customers would be paying for 381 primary block units each month. At other times it decided to use “seasonally adjusted billing”, which meant that customers were charged more of the primary block units in the winter months and fewer in the summer. In some years, such as last year, npower alternated between the two systems, which resulted in some customers being charged many more primary block units in a year than expected.
More worrying still, Mr Beck could find no evidence that npower had ever provided him with a clear explanation of its charging policy after introducing the two-tier tariff in April 2003. He says: “The methodology of charging for the primary block rate was much more complex than the simple system that it replaced. But npower failed to notify me of these complex changes for more than five years after it had introduced them.
“I would not have agreed to the changes had I been fully informed of them - but I wasn't. When the changes were fully explained to me this summer, I swiftly cancelled my contract with the company.”
In his court claim Mr Beck said that he considered npower to have been in breach of its contract since April 2003 and that all his gas charges from April 2003 to this August, when he left npower, should be recalculated at the prices in effect at March 31, 2003. This would have resulted in him paying £1,028.42 less to npower, over and above the £102 already being claimed for the company's overcharging.
Adding the two figures together, plus court fees and expenses, meant that Mr Beck's total claim against npower was £1,375, which it has now paid in full.
An npower spokesman says: “Npower confirms that it has made a payment to Mr Beck for the amount he has claimed in advance of a scheduled court hearing on October 14. We remain confident that we have calculated his bill correctly and that he has not in any way been disadvantaged.
“Although we are quite clear that Mr Beck has suffered no loss, we acknowledge that we have taken too long to respond to his problems and therefore have made a payment to reflect this - especially because the costs of attending court would have been significantly in excess of the amount claimed.”
Npower has previously admitted that some customers were charged more than 4,572 units at the higher rate in a 12-month period. But it argued that this was counterbalanced by price reductions that took place at the same time.
A spokeswoman for Consumer Focus, the new independent consumer champion, says: “If consumers notice a billing discrepancy, they should challenge it immediately.”
Which?, the consumer organisation, added: “The small claims procedure is very straightforward and effective.”
How to make a claim
Gather together your gas bills. If you no longer have them, request them in writing from npower.
Npower should charge a maximum of 4,572 units of gas at the higher rate over 12 months. Check whether it has charged more. Use April 1 to March 31 as the starting and finishing dates. Look especially carefully at the years 2004-05 and 2007-08.
For each year, work out how many units over the limit you have been charged and multiply them first by the higher rate and then by the lower rate. The difference is the amount that you should claim for overcharging.
Check whether npower has ever given you an explanation of its charging methods. If not, state that you believe that you have been wrongly charged from April 2003 (or when you became a customer, if later) to the present day. Calculate your entire usage over the period and work out how much it would have cost at the April 2003 rates. Then work out how much you have actually paid. The difference between the two figures is what you should claim.
Template letters to help you to make your claim can be downloaded at timesonline.co.uk/money
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Any support I provide is offered without liability, if you are unsure please seek professional legal guidance.
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Re: Overcharging case settled by npower
Nice time to dust off my reclaiming hat then
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