These two energy firms are paying customers £9.5 million after overcharging thousands

Wednesday, 29th January 2020, 3:49 pm
Updated Wednesday, 29th January 2020, 4:20 pm
Energy providers Ovo Energy and Utility Warehouse have both been found to have charged customers the wrong amount of money (Photo: Shutterstock)

Energy providers Ovo Energy and Utility Warehouse have both been found to have charged customers the wrong amount of money.

Millions of people across the UK are now due to get cash back - here’s everything you need to know.

Inaccurate statements and overcharging

Mistakes made at Ovo Energy (which recently took over the accounts of millions of SSE energy customers) affected hundreds of thousands of people.

Energy regulator Ofgem explained that inaccurate statements were sent to more than 500,000 Ovo customers between July 2015 and February 2018, with many not receiving one at all.

The firm also underestimated consumption one winter, which saw customers under or overcharged.

Around 10,000 people were not given statements of renewal terms, informed of when tariffs were ending, or moved to new tariffs when their existing deal ran out. Around 17,500 prepayment meter customers were not charged the right amount initially.

A total of 8,000 customers also paid more than Ovo was allowed to charge.

Millions of people across the UK are now due to get cash back - here’s everything you need to know (Photo: Shutterstock)

Will Ovo customers be refunded?

The energy firm has said that it has now refunded customers that were affected by overcharging on the prepayment meter cap, alongside writing off what customers owed if they had been charged at the wrong rate.

Ovo has also agreed to pay £8.9 millon into a voluntary redress fund in order to help vulnerable customers.

Ofgem director of enforcement, Anthony Pygram, 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 whilst its business was expanding.

"Our enforcement action sends a strong message that suppliers must get basic services right for all their customers.”

In a statement, Ovo said, “OVO Energy holds itself to high standards, but we have not always got it right. We accept Ofgem’s findings of issues regarding estimation processes, information formatting and pricing errors."

Utility Warehouse overcharged customers

Energy firm Utility Warehouse has also been found to have overcharged customers, with the company set to pay out £650,000 in compensation to customers.

The company is refunding and compensating 3,430 Warm Home Discount customers after it overcharged them when the price cap was applied.

The Warm Home Discount is a support scheme introduced by the Government in 2011, which is aimed at households who may struggle to pay their energy bills. The scheme will run until 2021.

The issue occurred in December 2019, when Utility Warehouse first noticed that customers who receive the Warm Home Discount payment, but pay for their energy when they receive a bill, were paying too much money.

The firm will hand back £450,000 to customers who overpaid, alongside an extra £300,000 of goodwill payments to those affected by the issue.

Similarly to Ovo, Utility Warehouse will pay £200,000 into Ofgem's voluntary redress fund.