Shell Energy Retail Limited will pay £400,000 to Ofgem’s voluntary consumer redress fund and £30,970 in goodwill payments to customers, after it overcharged prepayment customers on its default tariffs. It will refund and compensate the 11,275 customer accounts affected, totalling £106,000.
In March 2022, Shell Energy Retail Limited discovered that due to operational errors with the implementation of its default tariffs it had overcharged 11,275 prepayment customers for periods of time between January 2019 and September 2022. Tariff updates were sent to prepayment meters to amend rates in response to changes in the level of the price cap, but due to a variety of operational issues, not all meters were properly updated. Over 11,000 prepayment customers paid above the rates allowed under the price cap at the time and they will be refunded an average £9.40
Ofgem said “we have considered the additional financial hardship that this issue may have placed on prepayment customers, especially when energy prices are at historic high levels.” It also noted that in 2019 the company, then trading as First Utility, agreed to refund and compensate 12,000 customer accounts it overcharged when the price cap was introduced.
Ofgem said it had not taken enforcement action because Shell Energy Retail Limited self-reported the issue and has put in place steps to address the failings.