Ofcom fines Shell Energy £1.4m for not telling customers their contracts were up

Ofcom has fined Shell Energy £1.4 million for breaching the regulator’s rules after failing to let close to 73,000 people know that their contracts were coming to an end.

The watchdog said that Shell Energy had committed a “serious breach of our consumer protection rules”.

The business, which provides broadband as well as gas and electricity, said that it was “extremely disappointed” that it let customers down.

Investigators for Ofcom said that they had found a series of failings at the business. The rules require that people are told when their broadband deals are coming to an end, and what better deals they could opt for instead.

Some customers were not told their contract was ending at all, others were given incorrect or incomplete information, Ofcom said. In all 72,837 customers were affected between March 2020 and June 2022.

The regulator said that 7,750 customers were sent an end-of-contract notification with incorrect information about the price they would pay once their deal came to an end.

Of these, 6,054 paid more than they were originally quoted. They were overcharged by £65.81 each, or £398,417.67 in total. Shell Energy agreed to compensate these customers.

Ofcom said that it had given Shell Energy a 30% discount on its fine because it co-operated with the watchdog.

It also said that the fine would have been “significantly higher” had the company not reported the issues itself, co-operated with the inquiry, and took steps to remedy the problems.

“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,” said Suzanne Cater, enforcement director at Ofcom.

“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.”

Shell Energy Broadband 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.”