Investigation into Shell Energy Retail Limited’s compliance with end-of-contract notification and annual best tariff notification requirements

Following our investigation, Ofcom has today issued a Confirmation Decision to Shell Energy Retail Limited (‘Shell Energy’) under s96C of the Communication Act 2003 (the ‘Act’) for its failure to send end-of-contract notifications (‘ECNs’) and annual best tariff notifications (‘ABTNs’) containing specified information, as required by General Conditions (‘GCs’) C1.21, C1.23, C1.24, C1.27, C1,30, C1.32, C1.33 and C1.34 (previously GCs C1.10, C1.11, C1.13, C1.16, C1.17, C1.18 and C1.19) (the ‘Relevant GCs’).¹

The requirements to send ECNs and ABTNs are important consumer protection provisions that seek to ensure that customers understand when they are outside of their minimum contractual term and are free to stay on an existing deal, switch tariff with their existing provider, or change to a different provider depending on their preferred choice. ECNs and ABTNs also seek to ensure that consumers have the appropriate level of information to help them make that choice.

In light of the evidence obtained during our investigation, Ofcom is satisfied that – between 26 March 2020 and 14 June 2022 – Shell Energy contravened the Relevant GCs by failing to send ECNs and ABTNs to some of its customers, and in some instances by sending notifications with incorrect or incomplete information.

Our investigation found that 72,837 customers were affected by six of the errors identified, with:

• 64,565 customers not receiving an applicable notification;
• 7,750 customers receiving notifications that included incorrect information about out-of-contract pricing; and
• 522 customers receiving notifications that included incorrect information about best tariff offers.

Ofcom has found Shell Energy’s non-compliance with the Relevant GCs to be a serious breach of our rules to protect customers. In reaching this view we have taken into account:

• the duration of Shell Energy’s contravention;
• the degree of actual and potential harm caused by Shell Energy’s contravention; and
• the absence of effective processes in place to prevent the errors from occurring in the first instance and to identify the errors once they occurred.

In light of the seriousness of Shell Energy’s breach, our Confirmation Decision imposes a financial penalty of £1.4 million on Shell Energy. This penalty was set having had regard to our Penalty Guidelines and includes a 30% discount from the penalty Ofcom would otherwise have imposed following Shell Energy’s admission of liability and completion of Ofcom’s settlement process. This discount reflects the resource savings Ofcom achieved as a result.

In addition to the settlement discount received by Shell Energy, Ofcom notes that the penalty would have been significantly higher had it not self-reported the contravention, co-operated closely with our investigation and proactively taken steps to remedy the contravention following discovery of the issue. Notwithstanding the failings we have found in this case, we strongly encourage other communication providers to take note of Shell Energy’s conduct in this respect.

A non-confidential version of the Confirmation Decision is currently being prepared and will be published shortly.

¹ As a result of evidence gathered during our investigation, the initial scope of our investigation was widened to also consider Shell Energy’s compliance with GCs C1.21, C1.27, C1.30 and C1.34, and previous GCs C1.13, C1.16 and C1.19. Shell Energy was informed of this decision at the relevant stages of our investigation.

Following consideration of information provided by Shell Energy, Ofcom has decided to open an investigation into Shell Energy’s compliance with its obligations to send end-of-contract notifications (ECNs) and annual best tariff notifications (ABTNs) as required by General Conditions (GCs) C1.23 and C1.32 (formerly C1.10 and C1.17) respectively.

The information provided by Shell Energy indicates that it did not send these notifications to some customers for a period of time beginning in February 2021. It also indicates that some interim letters sent before a full solution was put in place may not have contained all of the required information. As such, the investigation will also examine whether Shell Energy has failed to comply with its obligations under GCs C1.24 and C1.33 (formerly C1.11 and C1.18) which set out (respectively) what information should be included in ECNs and ABTNs.

We aim to complete our evidence gathering phase in this investigation by the end of Summer 2022. We will publish a further update on next steps once that phase is complete.