Major broadband and phone company fined £1.4million for failing to notify customers

Shell Energy has been fined £1.4million by Ofcom

Shell Energy has been fined £1.4million for failing to flag end of contracts and best deals to thousands of phone and broadband customers.

An investigation by regulator Ofcom found the utilities firm did not communicate properly with more than 70,000 customers. Under consumer protection rules, customers must get timely reminders before their existing contract comes to an end.

More specifically, telecom and pay-tv companies must issue an “end-of-contract” notification by text, email or letter between 10 and 40 days before a contract finishes. Customers must also be contacted when they’re already outside their contract period, to remind them that they’re able to switch to another deal if they wish.

Both notifications must include information that will help customers understand whether they can save money by changing provider or signing up to a new deal. Ofcom found 72,837 customers were affected by the Shell Energy failures between March 2020 and June 2022.

Some customers didn’t receive any end of contract notifications or best deal notifications at all, while offers received messages with inaccurate or incomplete information. This was caused by a combination of manual errors and systems and process failures at Shell Energy.

Ofcom found 7,750 customers received incorrect information about the price they would pay once their minimum term period came to an end. As a result, 6,054 people went on to pay higher charges than they were originally quoted, collectively amounting to £398,417.67 – an average of £65.81 each.

Ofcom said it reduced the fine imposed on Shell Energy by 30%, as the utility firm admitted its failings, offered refunds to customers and has since made a number of changes to its system. Shell Energy decided not to issue refunds lower than £3 to ex-customers – instead of this, it donated an equivalent amount to charity. Ofcom has asked Shell Energy to make refunds available to these customers should they request it.

Suzanne Cater, Enforcement Director at Ofcom, said: “Every day tens of thousands of customers come to the end of their phone or broadband contract and can make significant savings by switching provider or signing up to a better deal. That’s why our rules, which demand that providers prompt customers with the information they need to take action, are so important.

“Shell Energy’s failings represent a serious breach of our consumer protection rules and they must now pay the price. This sends a message to the whole industry that we won’t hesitate to step in on behalf of customers if they don’t play by the book.”

A Shell Energy Broadband spokesperson said: “Transparency and clarity for our customers is something we believe in strongly so we were extremely disappointed to have let some customers down in the past by not providing them with the notifications and accuracy we should have. As soon as we became aware of the errors we self-reported to Ofcom, rectified the issues, compensated customers and supported Ofcom in its investigation. We apologise to any customer who we let down.

“Over the past 12 months we’ve made substantial improvements in our broadband customer service experience, dramatically reducing complaints and boasting one of the fastest call-answer times in the country.”