Npower has been ordered to pay a £26m fine after sending out inaccurate bills.
The energy company has been in trouble with Ofgem for both inaccurate bills and then a failure to deal with complaints correctly.
According to Ofgem, many of Npower’s problems began after a new IT system was introduced in 2011.
The failures of the IT system led to late and inaccurate bills and inefficient complaint handling, with complaints being incorrectly recorded for several years. This meant that unresolved issues were recorded as resolved and multiple records being created for one complaint.
Between September 2013 and December 2014 the company issued more than 500,000 late bills, while the regulator said that over two million complaints were made by Npower customers.
Ofgem said: "Npower often failed to resolve these issues promptly, pursued debts which were in dispute and failed to keep its own commitments to customers on billing. This caused significant distress and worry for many."
The regulator said that some customers did not receive bills for more than a year; UK billing rules state that companies cannot charge for energy used more than a year earlier, however, Npower did.
Dermot Nolan, Ofgem chief executive, said: "Npower failed its customers. Not only have its billing and complaint handling procedures been chaotic, it treated many of its customers poorly, which is completely unacceptable.
"Npower’s management failed to act quickly enough to protect its customers when things went wrong with changes to its IT system."
This isn’t the first time Npower has been fined, having faced a £2m fine in October 2011 for a similar offence.
The £26m fine is the biggest penalty that has been levied against energy suppliers by Ofgem, the second largest was a £12m fine for E.On for breaking energy sales rules in May 2014.
