Compensation paid out to energy customers after direct debits botched for eight years

Scottish Power apologised for putting households under "increased financial burden" during the energy crisis as it announced payments averaging £300.

Half the compensation is a refund and half is what it calls a gesture of goodwill following the technical error.

It will also donate £1 million to Ofgem’s Energy Industry Voluntary Redress Fund for vulnerable customers, bringing its total payments to £1.5m.

In total 1,699 direct debit customers were found to have been charged rates higher than the price cap between 2015 and 2023.

Customers are given a discount for paying their gas and electricity bills by direct debit. But they were charged the more expensive rate given to those paying by standard credit on receiving a bill.

The error had continued over 11 price caps to June 2023, six months after price caps hit a record high.

Scottish Power reported itself to energy regulator Ofgem last summer after realising the error.

Dan Norton of Ofgem, said: “The last few years have been challenging enough for energy customers facing increasing cost of living pressures, without the additional hardship of being overcharged. The price cap is there to protect consumers, and we take seriously any breaches of the safeguards we have put in place.

“Suppliers must be vigilant and act quickly to resolve billing errors that impact customers. We will continue to closely monitors all suppliers and will hold them to account if they do not meet the standards we set.”

Andrew Ward, from Scottish Power, said: “We’re so sorry that a very small number of our customers were affected by this mistake and faced an increased financial burden – especially during a time when energy prices were reaching an unprecedented high and the government had to step in to provide support."

Scottish Power customers affected by the errors will have the money paid into their accounts automatically and do not need to do anything.

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