Energy firms pay millions in 'switch' fines

Three major energy suppliers have been fined £8m after lengthy delays in producing final bills to more than 100,000 customers when they switched suppliers.

Industry regulator Ofgem said E.On Next, Good Energy and Octopus Energy either missed or delayed compensation payouts that were due when they did not provide a final bill within six weeks, as required when a customer switches to another provider.

Under rules, customers are entitled to a £30 payment each if a final bill is not produced in that time – with a further £30 due if the compensation is not provided within another 10 working days.

E.On Next paid the bulk of the fine, forking out £5.5m to almost 95,000 customers, while Octopus paid around £750,000 to 19,000 customers and almost 350 Good Energy customers received a combined total of £18,000.

The suppliers also paid an extra £1.7m to customers or the energy industry voluntary redress scheme, which supports vulnerable consumers, of which E. On Next paid £1.3m.

Neil Kenward, director for strategy at Ofgem, said: "Ofgem introduced these standards to make sure customers get the service they deserve when switching energy supplier.

"Our rules mean that where energy companies drag their heels, customers are automatically compensated. We won't hesitate to hold them to account.”

Ofgem say that switching standards will be increasingly important this year, as falling energy bills are expected to encourage customers shop around for the best deals.

It said the three suppliers have since updated their processes and systems to ensure final bills are produced within six weeks.