Shell Energy, one of the UK’s many broadband providers, has been fined £1.4 million after it failed to tell 70,000 phone and broadband customers that they could save money by signing up to a new deal.
Since 2020, the communications regulator Ofcom has required providers to proactively tell their customers that their existing contract is coming to an end. They also have to inform customers about how to shop around for a better deal - something Shell Energy failed to do.
In addition to contacting customers 10 to 40 days before the end of the contract, providers also have to contact customers annually about better details if they are out of contract. In this case, Shell Energy failed to send correct (or any) end-of-contract notifications and annual notifications to 72,837 customers so it has been fined.
Shell Energy fell foul of the rules between March 2020 and June 2022. 7,750 customers received incorrect information about how much they would pay at the end of their contract and of these 6,054 ended up paying higher charges collectively reaching £398,417.67.
The fine now has to be paid to HM Treasury within four weeks. As Shell Energy admitted its liability and entered into Ofcom’s settlement process, it got 30% knocked off the total fine.
Shell Energy said it has taken steps to remedy the issue and has refunded customers that were owed more than £3 - anyone who was owed less than this amount won’t get the money, it will instead be donated to charity - unless customers specifically ask for the money to be returned.
Commenting on the matter, Suzanne Cater, Enforcement Director at Ofcom, said:
“Every 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’s why our rules, which demand that providers prompt customers with the information they need to take action, are so important.
Shell Energy’s 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’t hesitate to step in on behalf of customers if they don’t play by the book.”
At the start of the year, Neowin reported on Ofcom’s report which looked at the best and worst broadband and mobile providers. Unsurprisingly, Shell Energy popped up as the most complained about broadband company. If you are in the UK and are looking to switch broadband provider, it’d be prudent to think twice before selecting Shell Energy.
Source: Ofcom