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Ofcom found that the failings dated back nearly four years
Shell’s electricity, phone and broadband provider arm has been fined £1.4m by Ofcom, the UK communications regulator, after an investigation found that Shell broke the rules that allow customers to get a fair deal on their communication services.
Shell failed to send the end-of-contract notifications and annual best tariff notifications to 72,837 customers between March 2020 and June 2022, which Shell claims were a result of both Shell’s manual errors and system processing failings.
These rules were brought in by Ofcom in 2020, and state that providers must notify their customers before their existing contract ends and provide information on the possibility of finding a better deal elsewhere. They also require providers to remind their customers if they are already outside of their minimum contract period.
Specifically, telecoms and pay tv companies must send out an ‘end-of-contract’ notification to customers between 10 and 40 days before their minimum contract period ends. Additionally, they must send notifications to customers who are already outside of their minimum contract period, reminding them that they are free to leave the contract. These customer alerts must include information to help customers understand if they can save money by changing provider or signing up to a new deal.
In total 7,750 customers received an end-of-contract notification that contained incorrect information about the price of their contacts after the end of their minimum terms. Of this number, 6,054 went on to pay higher charges than they were originally quoted, an average of £65.81 each.
“Everyday 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,” said Suzanne Cater, Ofcom’s Enforcement Director in a statement.
“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.” Shell claims that it self-reported to Ofcom as soon as they became aware of their errors, and apologise to all customers.
Ofcom must pay the £1.4 million fine to HM treasury within a month.
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