npower customer refunds welcomed by consumer watchdog

Consumer Focus, the consumer watchdog, welcomes npower's announcement to refund customers who overpaid for gas in 2007.  Consumer Focus has worked with npower to achieve the right outcome for its customers.

In 2007 npower changed the way it applied its charges for the first block of higher-priced gas units which households pay, but this change was not communicated effectively to customers.  An estimated 1.8 million customers are likely to have paid for more of these higher-priced units than they expected to pay.

In February 2009, following an Ofgem investigation, npower repaid an average £6 to 200,000 of its customers (£1.2million).  Consumer Focus and many customers thought this did not fully reimburse all those people who paid more for their gas because of the change, and pursued further discussions with npower.

npower has thoroughly reviewed its customers' billing records, working closely with Consumer Focus, to ensure a fair amount is  paid back which covers the overpayments in 2007. The average payment is £35, excluding VAT and interest. This offers refunds of £63 million for gas payments plus VAT and interest.  

Mike O'Connor CBE, Chief Executive of Consumer Focus, said: "Consumers have been waiting a long time for this announcement and we are pleased with the final result. Sixty three million pounds plus VAT and interest for consumers is an excellent outcome and shows a major commitment from npower to its customers.

"Consumer Focus has worked closely with npower to ensure that refunds are made fairly and that no customer loses out. A huge amount of work and collaboration has resulted in the right thing being done by npower for its customers and we welcome this.  It has been an great example of how consumer organisations can work with industry to deliver a fair deal for consumers. "

Customers do not need to do anything to claim these payments. npower will be writing to all affected customers over the next two months, offering payment that can be cashed at the Post Office. Consumer Focus would encourage customers to take advantage of this refund. If customers have further questions regarding the payment, or believe they may be entitled to a refund but have not been contacted by the end of November, they should call npower's helpline on 0800 975 7938 (this helpline is open from Monday 4 October). Consumers can find further information about the payments at consumerfocus.org.uk.