The government regulator carried out an investigation into the energy firm’s complaint resolution, call handling and billing processes during its implementation of a new £200m IT system.

While many customers experienced ‘unacceptably long call waiting times’, over 300,000 received late final bills, resulting in a ‘significant’ number of complaints the supplier received.

However, Ofgem said since the investigation began, the average call waiting time, rate of abandoned calls and the number of Ombudsman cases have all more than halved.

In addition, the number of late bills has fallen by 75 per cent and the company has co-operated throughout the investigation.

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 £18m 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.”

Neil Clitheroe, ScottishPower’s CEO of energy retail and generation, added: “With our new IT system now fully in place, our service performance has significantly improved and customers will start to see real benefits in managing their accounts.

“ScottishPower has worked with Ofgem throughout this investigation. We apologise unreservedly to those customers affected.”

Kate Morrison, energy specialist at Citizen Advice Scotland’s consumer futures unit, said: “ScottishPower has a poor track record when it comes to customer service and complaints handling – something that comes through clearly in our Citizens Advice Consumer Service and CAB data.

“We have seen spike in issues relating to ScottishPower including problems with billing procedures and the excessive call waiting times consumers encountered when attempting to contact this supplier.

“Citizens Advice supplier complaints figures demonstrated that in the last quarter of 2014 ScottishPower received the highest number of complaints ever recorded for a GB energy provider over a three-month period. Over this period ScottishPower received twenty times more complaints than the best performing supplier.

“We expect ScottishPower to do everything possible to ensure that consumers are treated fairly, and that those who have received poor service are compensated.”