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Big six challenger Ovo Energy fined for overcharging

Electricity bill

Overcharged: Ovo will pay a penalty

Ovo Energy, the big six energy challenger, has been fined £8.9m by Ofgem for issuing inaccurate or incomplete information to customers, and for under and overcharging customers due to IT issues.

The company, which recently completed the acquisition of SSE’s retail customers, has accepted that, for a period of over five years, failings in its IT systems and compliance processes resulted in too many customers receiving inaccurate or incomplete information. 

Ofgem’s investigation found:

– Inaccurate annual statements were sent to more than 500,000 customers during the period of July 2015 to February 2018. Many customers did not receive an annual statement; 

– Ovo Energy underestimated consumption over one winter, meaning customers were under or overcharged;

– 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; 

– 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;

– Some of these errors led to customers being over or undercharged.

Ofgem says Ovo Energy did not self-report the majority of the issues despite being aware of them and was slow to put things right.

Ovo Energy now accepts and has corrected these 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. 

It has agreed to pay £8.9m into a voluntary redress fund to help vulnerable customers.

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.

“Our enforcement action sends a strong message that suppliers must get basic services right for all their customers. Ovo Energy has accepted the breaches and put processes in place to comply with the rules in future.”

Ovo said in a statement: “Since the day we were founded, serving our customers has been our number one priority. We strive to give them the best experience by working hard to provide the latest digital innovations and excellent service.

“We have pioneered a new business model for the industry and have constantly innovated to simplify energy for our customers. 

“OVO Energy holds itself to high standards, but we have not always got it right. We accept Ofgem’s findings of issues regarding estimation processes, information formatting and pricing errors.

“We are proud of our record. In particular, during the time these infringements occurred, we were voted Uswitch Supplier of the Year 4 out of 5 times and achieved a customer satisfaction score of 96% – the highest in the survey’s 11 year history at the time. 

“We will continue to be guided by the current and future needs of our customers and will keep innovating towards a zero carbon world.”

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