Shell Energy will pay for price cap customers – Ofgem

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The Royal Dutch Shell logo is seen at a Shell petrol station in London, January 31, 2008. REUTERS/Toby Melville/File Photo

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Aug 25 (Reuters) – Shell Plc’s UK energy retail business (SHEL.L) is to pay 536,970 pounds ($635,181) for overcharging some customers on its default tariffs which are subject to a price cap, UK energy market regulator Ofgem said on Thursday.

The payment by Shell Energy includes a refund of £106,000 to affected prepay customer accounts as well as £400,000 to Ofgem’s Voluntary Consumer Redress Fund which distributes money to charities, trusts and consumers as a result of violations of license terms.

Shell Energy Retail Ltd reported in March that it had overcharged 11,275 prepaid customers over three years from January 2019 due to operational errors related to the implementation of its default tariffs.

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Under these tariffs, the amount UK energy suppliers are able to charge customers is limited by Ofgem’s price cap.

This year, this ceiling has been raised considerably due to much higher wholesale energy costs and is expected to increase further from October.

Ofgem said it decided not to take formal enforcement action against Shell Energy because the company itself had reported the issue and put in place measures to address the deficiencies.

“We are sincerely sorry that errors in updating our prepayment meter tariffs have caused some customers to be overcharged for some time,” a Shell Energy spokesperson said.

“The extra cost, which averages £9.40 per customer, will be refunded as a gesture of goodwill. We will write to customers to let them know,” he added.

In 2019, Shell Energy agreed to reimburse and compensate 12,000 customer accounts it had overcharged when price caps were introduced.

($1 = 0.8454 pounds)

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Reporting by Aby Jose Koilparambil in Bengaluru and Nina Chestney in London; Editing by Anil D’Silva and Christopher Cushing

Our standards: The Thomson Reuters Trust Principles.


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