Major energy suppliers hand out £7million in compensation after overcharging customers
A HOST of energy firms have paid out £7million in compensation and refunds to tens of thousands of customers after overcharging them.
Ten firms have handed out cash including Utility Warehouse, Octopus Energy and EDF Energy.
Ofgem, the industry regulator, said the compensation and refunds are being issued to more than 34,000 customers.
It comes after customers with more than one electricity meter point in their homes were incorrectly charged more than they should have been between January 2019 and September 2024.
Energy firms are allowed to apply multiple standing charges for homes with more than one electricity meter.
However, this rule meant some customers were charged more than is allowed under the price cap when combined with unit rates.
More than 20,000 Octopus Energy customers were overcharged and are being issued refunds totalling £2,636,884.
Over 2,300 OVO Energy customers were also affected, with refunds totalling £602,066.
There were also 8,272 Utility Warehouse customers hit by the error, with these customers receiving £2,043,098 in refunds or compensation between them.
This is the full list of firms that were impacted by the error:
- E.ON Next
- Ecotricity
- EDF Energy
- Octopus Energy
- Outfox the Market
- OVO Energy
- So Energy
- Tru Energy
- Utility Warehouse
- Rebel Energy
Charlotte Friel, director of retail pricing and systems at Ofgem, said: “We expect all suppliers to have robust processes in place so they can bill their customers accurately.
“While it’s clear that on this occasion errors were made, thankfully, the issues were promptly resolved, and customers are being refunded.”
Ofgem said all customers will be refunded automatically, if they have not been already, and do not need to take action.
If an affected customer has since changed supplier they will be contacted by their previous supplier to arrange a refund.
We have asked Ofgem how many customers are yet to receive compensation and will update this story when we have heard back.
All 10 suppliers who overcharged customers have updated their systems to prevent the error from happening again.
It comes after Ofgem said this week more than 2,000 Good Energy customers were issued compensation worth on average £66 each after a billing error.
The prepayment meter customers transferred to another energy firm or ended their contracts but did not receive final bills within six weeks, which is an Ofgem requirement.
Customers were also not refunded credit balances.
OTHER ENERGY FIRM FAILINGS
Ofgem has collected more than £400million in payments since 2020 through its compliance and enforcement activities, with the money used to help struggling households with their bills.
Back in September, OVO Energy was forced to pay out £378,512 to 1,395 customers over the historic failings.
Impacted customers received around £271 on average.
Ofgem found OVO took too long to address the almost 1,400 customer complaints, in some cases taking up to 18 months.
It also delayed actioning Energy Ombudsman decisions when complaints were upheld, Ofgem said at the time.
E.ON Next was also ordered by Ofgem last June to pay £5million to customers who suffered poor customer service.
The regulator said a review of the firm’s customer service standards and complaints-handling across the sector uncovered “severe weaknesses”, with customers facing long call waiting times and a high level of unanswered calls.
More than 500,000 customers were potentially affected, according to Ofgem.
The month before, Ofgem ordered Good Energy and OVO to pay out £2.7million to thousands of customers who were overcharged.
Good Energy was found to have overcharged nearly 7,000 customers a total of £391,650 between January 2019 and October 2022.
This was after the provider failed to adjust tariffs after customers changed their payment method.
4 ways to keep your energy bills low
Laura Court-Jones, Small Business Editor at Bionic shared her tips.
1. Turn your heating down by one degree
You probably won’t even notice this tiny temperature difference, but what you will notice is a saving on your energy bills as a result. Just taking your thermostat down a notch is a quick way to start saving fast. This one small action only takes seconds to carry out and could potentially slash your heating bills by £171.70.
2. Switch appliances and lights off
It sounds simple, but fully turning off appliances and lights that are not in use can reduce your energy bills, especially in winter. Turning off lights and appliances when they are not in use, can save you up to £20 a year on your energy bills
3. Install a smart meter
Smart meters are a great way to keep control over your energy use, largely because they allow you to see where and when your gas and electricity is being used.
4. Consider switching energy supplier
No matter how happy you are with your current energy supplier, they may not be providing you with the best deals, especially if you’ve let a fixed-rate contract expire without arranging a new one. If you haven’t browsed any alternative tariffs lately, then you may not be aware that there are better options out there.
Do you have a money problem that needs sorting? Get in touch by emailing money-sm@news.co.uk.
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