Credit, Collections & Insolvency News
Ofgem has ordered Octopus Energy to pay £1.5 million in refunds and compensation, after an investigation found thousands of errors on prepayment meter bills.
An investigation by the energy regulator, has found that ver 34,000 prepayment meter customer accounts with Octopus between 2016 and October 2023 did not receive final bills within six weeks, as required under Ofgem’s rules.
In recognition of the impact these issues may have had on prepayment meter customers, many of whom may be vulnerable, Octopus agreed to pay a total of £1.483million in compensation and redress. The average sum paid per affected customer was £43.
This includes refunds of £231,000 of credit that was remaining on accounts when they were closed, and a further £1,250,000 in compensation to affected customers.
Although customers have sight of their balance on prepayment meters, it is right that a final bill is produced in order to give them a clear indication of their final debit or credit position. Ofgem also recognises that suppliers do not always benefit from credits left on a prepayment meter account as these funds may be used by the new owner or tenant. However, this money is nonetheless owed to the customer who has accrued the credit and should be returned.
Beth Martin, Director for Consumer Protection and Competition at Ofgem, said “It’s important that customers receive final bills in accordance with our rules, so they are aware of any credit remaining on their accounts and can reclaim it. This is particularly important for prepayment meter customers who are more likely to be in financial difficulty.
“We are pleased that Octopus has now rectified the error and put things right with its customers, offering both refunds and compensation where it’s due.
“We will continue to closely monitor compliance with our billing rules, and drive improvements in the sector so customers can expect the highest standards of service from their energy supplier.”
The issue was identified after E.ON Next self-reported the same error to Ofgem. A detailed investigation followed, and Octopus has now updated its billing processes and systems ensuring PPM customers will receive final bills when their accounts are closed.
