Two energy companies will be paying out £2.7m to thousands of customers who were overcharged for the gas and electricity.
Ovo Energy and Good Energy reported themselves to industry regulator Ofgem when they realised they had charged some households more than the maximum rates allowed under either the Ofgem price cap or the Government Energy Price Guarantee (EPG).
Around 18,000 households will be refunded and offered compensation on top
- Good Energy will pay an average of £109 to around 7,000 customers.
- Ovo Energy will pay an average of £181 to around 11,000 customers.
Read more: Energy bills could rise £30 for households to cover cost of customers who avoid paying
Households are currently covered by the EPG, with the average bill standing at £2,500 a year for someone with typical energy use and Ofgem said it was "totally unacceptable" that these households did not receive protection they were due and were overcharged during an "already so challenging and stressful time" after energy bills soared in price.
According to the regulator, Good Energy overcharged 6,966 customers a total of £391,650 between January 2019 and October 2022, after failing to correctly adjust tariffs under the price cap and EPG when these users had changed their payment method. Good Energy says the the issue related to an "accidental flaw" in its processes where it didn't pass on discounts for paying by direct debit.
Ovo Energy charged 10,987 customers a total of £1,492,917 more than than Energy Price Guarantee between October 2022 and March 2023.
The £2.7m will include a refund of the amount overcharged, plus some compensation. Both energy firms will also pay an additional £1.25m to the voluntary redress fund, which helps vulnerable customers in the UK.
Dan Norton, deputy director of retail at Ofgem, told The Mirror: "Protecting consumers is always our top priority, and we expect suppliers to ensure customers pay no more than the level of the price cap or Energy Price Guarantee - schemes put in place with the very purpose of helping people. It is totally unacceptable that Good Energy and Ovo Energy customers were overcharged, particularly at a time that is already so challenging and stressful for consumers across the UK. Energy suppliers should hear this loud and clear: we expect suppliers to act with the utmost care and integrity. We will continue to hold them to account if they do not meet their customer protection or reporting obligations."
Both energy supplier have apologised for the error and said that most customers have already been compensated. A spokesperson for Ovo said: "We're very sorry to some of our fixed-price customers who experienced a delay in receiving the Energy Price Guarantee discount. We noticed immediately and self-reported the error to Ofgem. The issue has now been fixed and compensation has been paid as an apology."
Nigel Pocklington, Good Energy's chief executive, said: "We are very sorry that we let some of our customers down and promise to put things right. We have been contacting those impacted to apologise and issue their refunds and goodwill payments and will be fixing the issue so it does not happen again."
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Customers affected will be automatically refunded the overpayments and that most people should already have received these, usually as credit to their energy accounts, though some who've since switched may get the money by cheque or directly into their bank account.
The news comes the same week that Good Energy was one of three suppliers who were rapped by Ofgem and ordered to pay compensation to more than 100,000 customers after they were accused of "dragging their heels", by not paying fees that were due under rules put in place three years ago
E.On Next, Good Energy and Octopus Energy have paid about £60 a customer affected by the missed payments, which are due if a supplier does not provide a final bill within six weeks of someone switching away. A further £1.7m will be paid into Ofgem's voluntary redress fund.
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