ScottishPower faces renewed challenge over £79m warranty scandal

Between 1 July 2019 and 31 December 2019, at least 10% of people who switched energy supplier for both gas & electricity with Uswitch saved £479 or more.

One of the UK's Big Six energy suppliers has once again been embroiled in one of the country's largest ever extended-warranty scandals - more than a decade after initially making a £6m settlement.

Scottish Power has been accused of evading payments owed to more than 600,000 customers at a valued at a staggering sum of £79m.

Liquidators have claimed to have uncovered fresh evidence to again pursue ScottishPower over the issue, which first emerged in 2004.

At that point, Powerhouse, which had purchased ScottishPower's insurance arm and stores in 2001,  went bust.

This left customers who had initially purchased a Powerplan warranty on things including washing machines, fridges and other electrical goods from the old ScottishPower's shops, under the promise any warranty they did not claim on would be refunded, out of pocket.

Powerhouse claimed ScottishPower had given it a £75m indemnity against cashback claims made on the warranties, but ScottishPower later emphasised a legal flaw in the indemnity meant it could not be brought into action.

ScottishPower finally settled on a £6m settlement fee. However, liquidators now believe the energy giant took deliberate measures to avoid the full-scale payout.

In a ­letter to regulators, MacDonald Partnership says: "When ScottishPower realised the cost of making cashback payments was spiralling out of control, it deliberately evaded its ­liability."

Labour MP Gerry Sutcliffe is set to raise the issue in the Commons, where he will discuss  "repeated attempts by ­ScottishPower to evade their responsibility".  He wants ­Business Secretary, Vince Cable, to look into the the issue as a matter of urgency.

He told The Express: "This is another example of a corporate business not treating its customers properly and even with a certain amount of contempt."

ScottishPower has denied any wrong doing on the matter.

The firm issued a statement which read: "The PowerPlan extended warranty scheme, which was one of a number of similar extended warranty products offered by retailers across the industry, did not involve any wrongdoing by ­ScottishPower.

“ScottishPower sold its electrical retail business in 2001.

"ScottishPower does not agree with the picture presented, which contains a number of inaccuracies and omissions. ScottishPower will therefore strongly defend its position against any action that may be taken."

Latest gas and electricity news brought to you by UK Power - the energy price comparison site.

Click here to run an energy price comparison, and see if you could be paying less for your gas and electricity.