Ovo Energy ordered to pay back £8.9m for overcharging
● Ofgem also raps Utility Warehouse on knuckles over customer billing
Two energy firms have been ordered to pay more than £9 million for sending inaccurate bills to half a million customers and overcharging people.
Ovo Energy and Utility Warehouse have been warned by regulator Ofgem for issuing inaccurate or incomplete information to customers, and for under and overcharging customers due to IT issues.
Ovo, which was recently given the go-ahead to its acquisition of Perth-based SSE, was ordered by Ofgem to pay back £8.9m into a redress fund.
Utility Warehouse has been ordered to pay back £650,000 to customers for overcharging on bills.
More than 500,000 Ovo customers received inaccurate bills between July 2015 and February 2018. Meanwhile, Utility Warehouse was fined for overcharging people who already find it hard to pay their energy bill, as they receive the Warm Home Discount.
Ofgem said Ovo had underestimated consumption over one winter, meaning customers were under or overcharged, while around 10,000 customers were not given statements of renewal terms when tariffs were ending or were not moved to new tariffs when their existing tariff ended. A total of 17,500 prepayment meter customers were not initially charged at the correct regional level of the prepayment meter cap. A further 8,000 customers ended up paying above the level of the prepayment meter cap due to Ovo not moving them to new tariffs when their existing tariff ended.
Citizens Advice Scotland energy spokesman Dr Jamie Stewart said: “Customers who give their patronage to an energy company are entitled to fair treatment and that includes accurate billing. With Ovo taking on SSE’S retail business, they will have a significant market share in Scotland.
“The regulator is quite right to require Ovo to make this payment and it is good that the money will go directly to vulnerable customers. However, it is concerning that Ovo did not report these issues themselves.”
Rik Smith, uswitch.com energy expert, said: “Customers must come first. Ovo has to get these things right. They’re a big, well-established company about to become even bigger when they take on another 3.5 million customers from SSE.”
Ofgem said Ovo Energy had corrected the breaches, including refunding its customers affected by overcharging on the prepayment meter cap. It has also written off all amounts owing from customers who had been charged at the wrong rates.
Anthony Pygram, director of conduct and enforcement at Ofgem, 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.”