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Scottish energy firm fined 250 000

Article By: ,  Financial Analyst
February 17, 2015 10:26 AM

A Scottish energy company has been ordered to pay £250,000 to Citizens Advice after it was found to be mistreating customers.

Selkirk-based Spark Energy has been under investigation from regulator Ofgem and was deemed to have wrongly prevented customers switching to other suppliers. It also transferred customers when it should not have. The failings took place largely between June 2010 and October 2013 and has resulted in Spark being hit by a substantial fine.

Ofgem's investigation began in June 2013 after the regulator received a "high number" of complaints regarding the company. They concerned issues such as customer transfers, billing and refunds and there was also concern that the firm failing to deal with customer complaints in a manner they should.

A spokesman for Spark Energy explained that the company was happy with the manner in which Ofgem had handled the situation. They added that Spark had "learned valuable lessons" and apologised for any failings.

Sarah Harrison, senior partner in charge of enforcement at Ofgem, said: "The fact that Spark's problems occurred when it was establishing itself in the market is no excuse for not complying with its obligations. Following our intervention, Spark has made significant progress and has put in place new processes to resolve its issues."

Spark expansion

The £250,000 has come as a blow to Spark which has been outlining bold expansion plans in the past 12 months. In June, the company announced that it would be looking to increase its 200-strong workforce by at least a quarter in the next year.

This came as the firm doubled it turnover and also secured a £200,000 grant by Scottish Enterprise to allow it to build on its expansion plans. Spark had been performing well in recent years and made its first profit of £337,469 in 2013, compared with a loss of £3.26 million the year before.

A fine from Ofgem will no doubt come as a setback for the Scottish Borders energy firm.

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