Tens of thousands of household energy customers have secured payouts after a compliance review found they had been overcharged.
The industry regulator said that 10 suppliers had handed over compensation and goodwill payments to just over 34,000 customers. The total came to around £7m.
Ofgem said those affected, between January 2019 and September last year, had more than one electricity meter point at their property recording energy usage.
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It explained that while suppliers were allowed to apply multiple standing charges for homes with multiple electricity meters, it meant that some were «erroneously charged more than is allowed under the price cap when combined with unit rates».
The companies affected were revealed as E.ON Next, Ecotricity, EDF Energy, Octopus Energy, Outfox The Market,
OVO Energy, Rebel Energy [no longer trading], So Energy, Tru Energy and Utility Warehouse.
Of those, Octopus Energy accounted for the majority of the customers hit.
Ofgem said that the near-21,000 customers impacted had received compensation of £2.6m and goodwill payments of almost £550,000.
The redress was revealed at a time when energy bills remain elevated and debts at record levels in the wake of the 2022 price shock caused by Russia’s invasion of Ukraine.
Higher wholesale natural gas prices over the winter months meant that the price cap actually rose in April when a decline would normally be seen.
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The latest forecasts suggest, however, that bills should start to decline for the foreseeable future.
Charlotte Friel, director of retail pricing and systems at Ofgem, said of its compliance operation: «Our duty is to protect energy consumers, and we set the price cap for that very reason so customers don’t pay a higher amount for their energy than they should.
«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.»
The watchdog added that all ten suppliers had updated their systems and processes to prevent the error occurring in future.
The collective amount reached approximately £7 million. Ofgem disclosed that the impacted individuals, spanning from January 2019 to September of the prior year, possessed multiple electricity meter points at their residence that were monitoring energy consumption.
Ofgem explained that although suppliers had the liberty to impose multiple standing charges for households with numerous electricity meters, this resulted in some customers being inaccurately billed in excess of what was permissible under the price cap when combined with unit rates. The companies implicated in this issue were E.ON Next, Ecotricity, EDF Energy, Octopus Energy, Outfox The Market, OVO Energy, Rebel Energy (no longer operational), So Energy, Tru Energy, and Utility Warehouse. Among these, Octopus Energy had the largest number of affected customers.
The regulatory body announced that nearly 21,000 customers impacted by this discrepancy had been compensated with £2.6 million and received goodwill payments totaling almost £550,000. This redress was disclosed amidst persistent high energy bills and record-level debts following the 2022 price upheaval triggered by Russia’s invasion of Ukraine.
The heightened wholesale prices of natural gas during the winter months led to an unexpected rise in the price cap for April, contrary to the usual decline. Despite this, current projections indicate a forthcoming reduction in energy bills. Charlotte Friel, Ofgem’s Director of Retail Pricing and Systems, emphasized the importance of the organization’s compliance measures in safeguarding energy consumers and ensuring accurate billing processes by suppliers.
Ofgem emphasized the necessity for all suppliers to implement robust systems to accurately bill their customers and prevent overcharging. While acknowledging the errors made in this instance, the swift resolution of issues and subsequent refunds to customers were highlighted. Additionally, all ten suppliers involved in the incident have updated their systems and procedures to prevent similar errors from occurring in the future.
Tens of thousands of household energy customers have received compensation and goodwill payments following a compliance review that identified overcharging issues. The regulatory body disclosed that 10 suppliers collectively compensated over 34,000 customers, underscoring the importance of accurate billing and consumer protection in the energy sector.
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