ScottishPower, a subsidiary of Basque group Iberdrola, has been fined £18 million after an investigation by UK energy market regulator Ofgem into the Scottish firm’s “complaint resolution, call handling and billing processes.”

Ofgem said problems arose during and following ScottishPower’s implementation of a new IT system.

Up to £15 million of the £18 million will be paid to “vulnerable ScottishPower customers that were affected by customer service issues” and the remainder will go to charity.

Ofgem said it found that ScottishPower failed to treat its customers fairly.

“It had insufficient contingency plans and it didn’t do enough to protect its customers from issues that arose from the implementation of the new IT system,” said the regulator.

“This resulted in a significant increase in the number of complaints the supplier received.

“ScottishPower also handled some of these complaints poorly with a significant number taking too long to resolve.

“Many customers experienced unacceptably long call waiting times with many calling multiple times and hanging up before getting through.”

Ofgem said thousands of Ombudsman rulings were not implemented within the required 28 days.

ScottishPower’s failures also resulted in more than 300,000 customers receiving late final bills.

This meant some customers did not promptly receive money they were owed.

Ofgem said that since it opened the investigation, ScottishPower had improved its customer service.

The average call waiting time, rate of abandoned calls and the number of Ombudsman cases have all more than halved.

The number of late bills has fallen by 75%.

Dermot Nolan, Ofgem chief executive said: “ScottishPower let its customers down during the implementation of a new IT system.

“When things went wrong, it didn’t act quickly enough to fix them.

“This created frustration and worry for many customers, who also wasted a lot of time trying to contact the supplier by phone.

“The £18 million payment sends a strong message to all energy companies about the importance of treating consumers well at all times, including while new systems are put in place.”