Three energy firms to pay £8m compensation over late bills

18th May 2023

Three energy suppliers have been made to pay compensation totalling £8 million for failing to supply a final bill on time to more than 100,000 households that had switched provider.

Apasrt of the measures energy customers who have been overcharged are to receive a combined total of £2.7 million from two suppliers – Good Energy and OVO Energy following an investigaton from energy regulator Ofgem.

Consumers in a vulnerable situation across the UK will also benefit from an additional £1.25 million payment to Ofgem’s voluntary redress fund in recognition of the suppliers’ failure to apply the price protections put in place at the height of the energy crisis.

As part of its compliance work, Ofgem found that approximately 18,000 customers did not receive the protection they were due, as errors by the two suppliers saw them charged above the maximum rates allowed under either the energy price cap or the Energy Price Guarantee Government scheme, which was put in place to protect consumers.

The failings were that Good Energy overcharged almost 6,966 customers a total of £391,650 with reference to the price cap and Energy Price Guarantee between January 2019 and October 2022. This was due to operational failures to adjust tariffs after customers changed their payment method.
Between October 2022 and March 2023, a total of 10,987 OVO Energy customers were overcharged £1,492,917 above the Government’s Energy Price Guarantee, brought in last winter to protect consumers as households struggled to cope with rising energy prices.

Those customers affected will now be automatically refunded and receive compensation. The average amount paid to Good Energy customers will be £109 while OVO customers will receive an average of £181. Customers affected do not need to do anything; they will be automatically refunded.

Good Energy will pay £1.25 million to Ofgem’s voluntary redress fund for the inadequate systems, processes and repeated inaccurate reporting of information to the regulator over an extended period. OVO will also pay £10,000 to the redress fund for reporting issues. The redress package sought would have been considerably higher had OVO not quickly engaged Ofgem and resolved the issue in a timely manner. This is in line with the expectations set out by Ofgem in a letter to all suppliers in September 2022.

The redress fund provides support to energy consumers in vulnerable circumstances.

Dan Norton, Deputy Director of Retail, Ofgem said “Protecting consumers is always our top priority, and we expect suppliers to ensure customers pay no more than the level of the price cap or Energy Price Guarantee – schemes put in place with the very purpose of helping people.”

“It is totally unacceptable that Good Energy and OVO Energy customers were overcharged, particularly at a time that is already so challenging and stressful for consumers across the UK. Energy suppliers should hear this loud and clear: we expect suppliers to act with the utmost care and integrity. we will continue to hold them to account if they do not meet their customer protection or reporting obligations.”