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Ofgem, the independent regulator of the energy sector, has hit Npower with a £2 million fine for not handling customer complaints properly.

Specifically, Npower had failed to record complaints properly or referred customers with grievances to the Energy Ombudsman’s redress service, according to Ofgem.

Ofgem has noted that all regulatory breaches have now been corrected by Npower.

A spokesman for the company said: “We are very sorry, we let our high standards slip on this occasion,” adding “a small number of processes were not correctly adhered to. We have zero tolerance for this type of issue and we’ll continue to work hard to make sure our customers are put first.”

The UK’s gas and electricity markets are dominated by the so-called ‘big six’ – Npower, British Gas, EDF Energy, E.ON, and Scottish Power. Complaint-handling at EDF is also being investigated by Ofgem at the moment, whilst British Gas was fined £2.5 million by the regulator in July, for the same offence.

Ofgem has introduced sweeping reforms in the retail energy market, and expects energy suppliers to make the most of this opportunity to “convince customers that they can be trusted,” according to the regulator’s Managing Director of Corporate Affairs, Sarah Harrison. She added that “this is the quickest way of restoring consumer trust in an industry badly tarnished by poor supplier behaviour.”

New complaint-handling regulations were introduced in October 2008, setting out minimum standards that customers should expect when making a complaint. These regulations were designed to form a counterpart to the work of the Energy Ombudsman, which was formed in 2003 and exists to deal with complaints that companies can’t resolve on their own.

Adam Scorer, of Consumer Focus, said: “It is welcome to see Ofgem willing to hammer home the point that unless energy companies start treating consumers fairly there will be a price to pay,” adding “the energy industry is one of the least trusted by consumers and people need to see real changes to customer service if this trust is to be rebuilt.”

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