Ovo Energy whose £500 million acquisition of SSE’s customers makes it the second largest UK energy supplier, has agreed to pay £8.9 million in redress for wrongly charging customers and providing inaccurate or incomplete information to them for over five years.
Regulator Ofgem said the problems were caused by IT issues and “Ovo did not put enough attention on ensuring its processes and governance were capable of complying with Ofgem’s rules”. What is more, although Ovo Energy was aware of the issues it did not self-report most of them and was slow to put things right.
Ofgem’s investigation found a suite of issues, including:
- Inaccurate annual statements were sent to more than 500,000 customers between July 2015 and 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;
- 8,000 customers ended up paying above the level of the prepayment meter cap because Ovo did not move them to new tariffs when their existing tariff ended;
- Some of these errors led to customers being over or undercharged.
Ofgem said 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 £8.9 million into a voluntary redress fund to help vulnerable customers.
Anthony Pygram, director of conduct and enforcement at Ofgem, said: “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 Energy’s acquisition of SSE’s customers will mean a five-fold increase Ovo’s customer base.
Suppliers set for a shakeout In the Ovo/SSE tie-up, the smaller company could be taking on one five times its size
Stay up to date with New Power’s online news. Sign up for our FREE weekly newsletter here