Energy firm iSupply charged thousands of its customers illegally high bills, and will now have to pay £1.5million into a redress fund as well as compensation and refunds to the people affected.
Regulator Ofgem said iSupply overcharged around 4,400 customers who were on default tariffs - which are protected by the energy price cap.
Anthony Pygram, Ofgem's director of enforcement, said: “The action we have taken against iSupply sends a strong message that all suppliers must treat their customers fairly and quickly address known harm so that customers are protected, or face the consequences.”
The energy price cap covers 11 million customers on default tariffs - and came into force on 1 January 2019.
Senior employees at iSupply knew about the breach in January 2019 but did not report the issue, the regulator said.
The overcharging emerged after a whistleblower came forward to Ofgem in August 2019.
“If a licensee breaches the rules, it quickly needs to tell Ofgem and put things right for its consumers. However, iSupply has admitted it failed to do so in this instance," Pygram said.
“Suppliers must charge their default tariff customers at or below the level of the price cap. Senior staff at iSupply knew that they were overcharging default tariff customers yet failed to refund them and report the issue to Ofgem in a timely manner.”
iSupply will now have to pay £1.5 million to the voluntary redress fund and said it has refunded customers it overcharged.
Richard Neudegg, uSwitch.com head of regulation, said: “iSupply has badly let down consumers.
"Mistakes can happen, but they overcharged their own customers and did nothing about it until the regulator stepped in.
"The only reason this came to light was because of a whistleblower.
“People comparing energy tariffs will now be looking at iSupply and wondering whether they will be treated fairly.”
