Ovo Energy is being forced to pay £8.9m by energy industry regulator Ofgem after it was caught overcharging customers. The firm sent also inaccurate statements to customers and, despite discovering the problem themselves, failed to inform Ofgem.
Having purchased SSE’s retail business last year, Ovo Energy have temporarily become the UK’s second-largest energy company behind British Gas. They are already the largest independent supplier with more than 1.5 million original customers. The purchase of SSE saw them take on another 3.5 million customers.
Ovo Failed to Prioritise Problematic Issues
Ofgem’s Head of Enforcement, Anthony Pygram, said: “Ovo Energy billed a number of its customers incorrectly and issued them with inaccurate information. The supplier did not prioritise putting these issues right whilst its business was expanding.”
Another issue is that many of the firm’s customers did not receive a bill in any form. Ovo have agreed to pay the hefty settlement package in order to avoid a fine. However, instead of being paid to the Treasury, the money will be dispersed among vulnerable customers.
How Ovo Energy Overcharged Customers
Ovo made serious errors when estimating fuel usage during the winter of 2017. This resulted in thousands of customers being charged the wrong amount, with at least one being overcharged by over £4,500.
The next mistake was their decision to not refund customers who were overcharged by less than £10. Ovo has stated they have fully refunded the larger overcharges.
Ofgem’s report on the investigation said: “Ovo explained that it did not believe it was an efficient use of resources to process 120,000 small value refunds. These monies did not belong to Ovo but to the customers impacted by Ovo’s mistake.
The energy regulator also commented on the inaccurate information Ovo sent to around 160,000 customers. They said: “Ovo’s failure to issue accurate documents may have resulted in some customers making decisions to switch or remain with Ovo based on inaccurate information. These customers may have suffered detriment in missed savings opportunities.”
More Energy Suppliers Found Overcharging
There was another energy supplier caught overcharging recently, with Utility Warehouse paying £200,000 into the Energy Industry Voluntary Redress Scheme. They also had to pay £450,000 back to 3,430 customers who they overcharged due to a ‘systems error’.
The overcharged customers should have received the Warm Home Discount, but instead were charged above even the Government’s price cap. Each overcharged customer will an average of £131.20 each.
A Utility Warehouse spokesperson said: “As soon as we realised the mistake we reimbursed them for the overcharge, gave them an additional credit on their account and put them onto the correct tariff.
“We have been working closely with Ofgem since identifying the issue and have also made a significant voluntary contribution to the Energy Redress Scheme, which helps consumers in vulnerable situations, those negatively impacted by energy company issues and funds the development of innovative energy products and services.”
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