Compensation averaging nearly £300 is being paid to some Scottish Power customers after they were overcharged for eight years.

Some 1,699 direct debit customers were charged a higher rate than the relevant price cap between 2015 and 2023.

Half of the compensation payment is a refund, while the other half is what the company describes as a goodwill gesture following the technical error.

It has apologised for the mistake and will also make a donation of £1m to a fund for vulnerable customers.

All payments will be made automatically, and customers do not need to do anything.

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."

He said the company took swift action when the error emerged, and reported itself to Ofgem, the sector's regulator.

'Additional hardship'

Some customers were wrongly charged under the price capped tariff for those who pay by standard credit, or on receiving a bill. This is higher than the tariff for direct debit billpayers.

Ofgem said it took any breaches of the price cap seriously.

"The last few years have been challenging enough for energy customers facing increasing cost-of-living pressures, without the additional hardship of being overcharged," said Dan Norton, from Ofgem.

But he said the compensation package reflected the "timely" response from Scottish Power after the error came to light.

What can I do if I can't afford my energy bill?

Check your direct debit: Your monthly payment is based on your estimated energy use for the year. Your supplier can reduce your bill if your actual use is less than the estimation.

Pay what you can: If you can't meet your direct debit or quarterly payments, ask your supplier for an "able to pay plan" based on what you can afford.

Claim what you are entitled to: Check you are claiming all the benefits you can. The independent MoneyHelper website has a useful guide.

Source:
courtesy of BBC NEWS

by Kevin Peachey

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