Ovo Energy to pay £8.9m for overcharging customers

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OVO Energy has agreed to pay £8.9m for issuing inaccurate or incomplete information to customers, and for under- and overcharging customers due to IT issues.

These breaches occurred while Ovo did not put enough attention on ensuring its processes and governance were capable of complying with Ofgem’s rules.

Ovo Energy has since put in place measures to make sure this doesn’t happen again, including investments in technology and implementing appropriate compliance procedures.

Ovo Energy 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.

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

The company 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 while 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.”