MPs Slam ScottishPower in Damning Report

LONDON, April 20, 2016 /PRNewswire/ --

A group of MPs specifically formed to investigate a major consumer mis-selling scandal that has lasted for more than a decade, today (Apr 20^th) release their highly damning assessment, claiming that one of the UK's Big Six energy suppliers not only sustained the scandal for years, but sought subsequently to cover it up.  

The All-Party Parliamentary Group (APPG) on ScottishPower's Cashback Mis-selling, made up of 28 MPs, took evidence over recent months into how 625,000 consumers across the UK - many of them pensioners - lost out collectively on more than £75 million in unpaid consumer goods guarantees to which they were entitled.

The MPs are now calling for a formal Select Committee hearing into the scandal so that ScottishPower executives can be called to account for their actions before Parliament, opening the way to achieving some form of justice, including compensation, for those consumers who are affected.

Launching the report, the Chair of the APPG, Andrew Percy MP, said;

"Over the past year this group has been compiling evidence from many sources, including liquidators, regulators, former customers and employees on how this came to pass; much of that evidence made detailed allegations of fraud, criminality and more. Therefore, we have been shocked by the complete lack of uptake by regulators and authorities to date, and I expect this report to make them sit up and take notice. 

"There is no doubt in our mind that selling a Cashback Promise that was neither financially capable of functioning, nor designed to deliver, is effectively a fraud on the public - and they have been covering it up ever since. Indeed, we do not believe it was in ScottishPower's gift to sell on that promise (which was to their customers) to another retailer in the first place. It is high time they were held accountable and I look forward to taking this report to our meeting with the Minister next week (27 April 2016), I am sure he will agree with our assessment." 

Alan Campbell, the whistleblower who originally brought the scandal to the attention of Parliament and who has fought relentlessly for ScottishPower management to answer for their actions, said;

"I've spent the past 5 years of my life fighting to get this issue the attention it deserves. I'm incredibly grateful to the MPs for shining a light on a fraud that has gone unanswered for too long. 

"This group has now seen with their own eyes an evidence trail that stretches back to the late-1990s and drawn their own conclusions.  

"The fact that ScottishPower have refused to properly engage with this investigation, indeed refusing to turn up to the evidence session, only speaks to their guilt. I only hope that now in light of this report that Parliament acts to drag ScottishPower out into the open to truly account for themselves. That scrutiny will, I'm sure, expose them for what they are - and that is a company not fit to be responsible for 5.3 million customers. 

"I have started a Government e-Petition so that other dissatisfied consumers who have had enough of this company's abuse of customers' trust can join the call - I encourage you to sign it." 

The PowerPlan Cashback Promise 

PowerPlan Company Ltd was set up by ScottishPower to issue warranties on white/brown goods (such as TVs, fridges, cookers, etc.) in the late 1990s and early 2000s. Cashback warranties were sold on these goods, meaning that if you didn't claim on your warranty within 5 years they would give you the cash deposit back. These warranties were called PowerPlan, and a sub-company PowerPlan Company Ltd (PPCL) was set up in the Isle of Man to issue the warranties for the purposes of avoiding VAT.

The scheme went under in 2004, following its sale to another retailer (Powerhouse) and ScottishPower refused to pay out on the cashback offer on the warranties. In 2004/5 thousands of people started calling in their cashback but the cashback warranties were never paid, meaning that 625,000 customers across the UK have lost out on a combined £75m.

Notes to editors 

• The APPG are releasing their report, and holding a Q&A, at 10.00am in Room O, Portcullis House, Westminster.
• The APPG on ScottishPower's Cashback Mis-selling has now released a report on their investigation into the scandal. The report calls for a number of regulators to use their powers to investigate, including a Parliamentary Select Committee who would have the power to call ScottishPower to account in person. For a copy of the report please either contact the APPG directly.
• The APPG are meeting with the Consumer Affairs Minister, Nick Boles MP, on 27 April 2016 to discuss their findings and try to seek a resolution for customers.
• For more information on the ScottishPower Broken Promises campaign, or to speak with customers who lost out, please email info@scottishpowerbrokenpromises.co.uk.
• In the late 1990s and early 2000s ScottishPower used to have retail stores that sold TVs, fridges, washing machines, etc. On those they used to sell cashback warranties, meaning that if you didn't claim on your warranty within 5 years they'd give you the cash deposit back. These warranties were called PowerPlan, and a sub-company PowerPlan Company Ltd (PPCL) was set up to issue the warranties.
• In 2001 ScottishPower sold their stores to another retailer, Powerhouse, on the proviso that the already existing claims would be covered by ScottishPower.
• In 2004/5 thousands of people started calling in their cashback. When Powerhouse tried to call on their indemnity with ScottishPower they reneged on the agreement. Powerhouse, partly as a consequence of this, went bust. 625,000 customers never got their money back, meaning over £75m is still owed.

For more information or to arrange an interview with Alan Campbell please contact James Hargrave on +44-(0)7900-904-707 or james.hargrave@jbp.co.uk. For a copy of the report or more information on the All-Party Parliamentary Group please contact the Chair, Andrew Percy MP, on +44-(0)20-7219-7208 or andrew.percy.mp@parliament.uk.