Thousands of residents in Dumfries and Galloway could be owed as much as £300 each by Scottish Power due to a scandal involving a cashback warranty scheme, says local MP Richard Arkless.
In the late 1990’s and early 2000s Scottish Power sold a 100% cash back warranty to customers throughout the UK but never paid a single penny back to their customers when the time came for them to claim the refund.
Mr Arkless has joined an All-Party Parliamentary Group (APPG) that was formed to investigate this £75million miss-selling scheme which has affected 625,000 Scottish Power customers throughout the UK.
Scottish Power set up Power Plan Company Ltd (PPCL) 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’d give you 100% of your cash deposit back.
The scheme went under in 2004, following its sale to another retailer and Scottish Power refused to pay out on the cashback offer on the warranties. In 2004/5 thousands of people started claiming their cash back but the claims were not honoured. It is estimated that Scottish Power made around £75million from the mis-selling of these warranties.
The APPG called on key witnesses and stakeholders to join them for an evidence session in Parliament. The group of MPs questioned witnesses involved in the scheme’s collapse, as well as regulators who investigated it at the time.
Mr Arkless has a background as a consumer lawyer and played a key part in the questioning. He added:
“This is a scandal of massive proportions affecting over 290,000 people in Scotland and thousands across Dumfries and Galloway. It is estimated that 1 in 4 of the Scottish population were hit by this scam. It is an absolute disgrace that Scottish Power, one of the country’s largest utilities can make a promise to its customers and so blatantly break that promise.”
“Scottish Power must be held to account. They refused to attend this APPG meeting despite the attendance of the Insolvency Service and the liquidators; they continue to mislead us about their involvement in the scheme and shirk all their responsibility to their customers. The numbers involved here mean more people in Scotland are affected by this than were affected by PPI.”
“It is worth remembering that the people who were most likely to buy this warranty were often in a vulnerable financial situation to begin with. These customers have bought a product in good faith, with a 100% money back guarantee and have been left high and dry. A classic example of large corporations devising schemes they hope to slip by their customers.”
Mr Arkless said that the APPG would see MPs take this investigation forward, finally putting the evidence of this scandal into the public domain.
He added that the meeting was an important opportunity to hear from those ‘at the heart of the scandal’, concluding that:
“Scottish Power have some vital questions to answer and their silence and refusal to show face at Parliament is hugely disrespectful to their many customers. We have contradictory evidence they need to explain – in one breath they say they are not liable – we then have letters from their legal department saying they are liable. The whistle-blower and the liquidators are clear it is Scottish Power who is liable.”
“What is clear is that they are trying anything to avoid liability when thousands of my constituents are owed money – for that reason alone I will not be letting this one go. The APPG will now consider all the evidence presented at last week’s meeting and decide on our next course of action.”
Mr Arkless can be contacted by email [email protected] or by phone on 01387 265 698
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