Credit, Collections & Insolvency News
Energy supplier E.On has paid out more than £627,000 to its customers in redress after an error led to 1.6 million customers having their direct debits taken from their accounts earlier than planned.
A majority of the payments affected were due to be taken in January this year, but the energy supplier erroneously took payments on 24th December 2020. Ofgem This meant customers may have experienced out of pocket expenses; unexpected overdraft bank charges; difficulty making payments in the run-up to Christmas; and other unforeseen circumstances.
The energy regulator has now closed compliance engagement with E.On and the company has agreed to make goodwill payments to compensate customers affected by additional bank charges and pay an additional £627,312 to the energy redress fund.
E.On says that the payments were taken due to a technical fault, following changes.
Ofgem said that it considers that E.On failed to conduct the appropriate checks to ensure that this would not lead to any unintended consequences for customers.
E.On self-reported the issue to Ofgem on 24th December and continued to engage throughout January and February 2021. E.On made redress and goodwill payments totalling £55,039 to customers who contacted the supplier to say they had suffered additional bank charges, out of pocket expenses or other detriment, as a result of the Direct Debits being taken early.
Anna Rossington, Director of Retail at Ofgem, said “Ofgem expects suppliers to adhere to the terms of contracts they have with customers, in particular the agreed Direct Debit payment dates. This failure is a reminder to suppliers that when making changes to their systems, they need to undertake appropriate checks to avoid any unintended consequences for customers.”
“Ofgem is always prepared to work with suppliers who have failed to comply with their obligations, but who have self-reported and are determined to put things right, as E.On has done.”
Lisa Barber, Which? Senior Editor, said “This early payment would have come as a shock to many E.On customers, particularly at Christmas when people are often under immense financial strain and at risk of going into the red – with potential knock-on effects for their overdrafts and credit reports.”
“It is good to see the regulator obtain this agreement from E.On to compensate its customers and vital that the company puts measures in place to prevent this happening again.”