Regulator gets tough with utility

E.On pays out again after overcharging customers

Electricity billEnergy firm E.On has been fined £7.75m for overcharging its customers, a second penalty for the company after it paid out £1.7m in November 2012 for a similar breach.

A spokesperson for the company claimed the “underlying cause” was different. Sarah Harrison, speaking for regulator Ofgem, said the latest fine was for “repeated failures.”

Ofgem said it had secured the payment from E.On after it incorrectly charged exit fees and/or overcharged customers following price rises.

This is in addition to the £400,000 the company has already paid back to potentially affected customers. It is in the process of refunding remaining customers to ensure they did not lose out financially.

E.On was found to have made billing errors in respect of price rises in January 2013 and January 2014. These affected direct debit and standard credit customers. The average amount paid back was around £8 and £12 respectively. E.On has made refunds to around 40,000 customers; however the number of customers actually affected by the issue is likely to be significantly less.

“It’s absolutely unacceptable that E.On failed to provide vital customer protections yet again, and this persistent failure is the reason for the high penalty,” said Ms Harrison.

Ofgem said many customers were asked to pay too much in the process of switching while others were charged wrong exit fees. Around 48,000 customers, including 7,000 pre-payment customers, were potentially affected in the latest instance.

The company has apologised for its failings and will pay the fine to the UK Citizens’ Advice Bureau to help vulnerable consumers.

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