Today it is announced that Ofgen is fining Npower £3.5m for "breaching sales rules". In this instance it is because their sales process did not allow customers to compare offers from competitors fairly. (Just for a bit of context, back in October 2011 Npower were fined £2m by Ofgen for failing to handle complaints properly.)
Npower has stated that the latest penalty will be used to help "vulnerable customers" ie those customers on the "warm home discount" who will be given £25 each so it's a good Christmas present for them.
Ofgen states that there are 2 more investigations with the big power companies underway. Along with the financial regulator, the investigations and fines we have seen over the last couple of years have shown their real commitment to getting it right for customers. These companies and the sectors they represent are being damaged significantly in terms of reputation and public trust. Key elements in building reputation/trust are transparency and fair treatment of stakeholders, to build sustainable long-term value,which is surely what their shareholders want.
To ensure that "conduct risk" is mitigated surely the only long-term, successful strategy has to be deep-rooted and committed cultural change to ensure that everyone behaviours in these large organisations is really geared up to improving customer outcomes.
Merry Christmas.
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