Scottish Power Faces Sales Ban Over Customer Service Woes

One of Britain's "big six" energy suppliers, Iberdrola (IBE.MC)-owned Scottish Power, could face a selling ban if it doesn't improve certain customer services, including cutting helpline waiting times, the energy regulator said on Friday.

Watchdog Ofgem launched an investigation into some of Scottish Power's customer services on Friday and gave the energy supplier monthly deadlines to improve them or it will suspend the company's sales activities.

Britain's energy suppliers are in stiff competition for new customers as smaller providers are gaining market share and a sales ban would hurt Scottish Power's ability to gain new users.

Scottish Power has until the end of this month to address a backlog of customer complaints acted upon by the energy Ombudsman and faces a Dec. 31 deadline to cut its overdue customer bills to 30,000 from 75,000, Ofgem said.

The regulator also ruled Scottish Power has to significantly speed up the time it takes to answer customer calls by the end of January.

"The need for our intervention here is yet more evidence that the energy market is not working for consumers," said Sarah Harrison, senior partner in charge of enforcement at Ofgem.

The investigation was launched under Ofgem's new standards of conduct regulation that came into force last year.

The entire energy retail market is currently under investigation by Britain's competition watchdog in a probe that could lead to the break-up of the biggest energy suppliers.

"(The big six energy suppliers) must rapidly improve basic standards in customer service now and not wait for the outcome of the competition inquiry," said Richard Lloyd, executive director at consumer body Which?.

(Reporting by Karolin Schaps; Editing by Mark Potter)