Ovo energy fined £9m after overcharging thousands of customers

Company sent inaccurate bills to households and failed to act quickly to fix problems, says watchdog

The privatised energy market is attracting heated criticism (Reuters)

Energy supplier Ovo Energy is to pay £8.9m to the industry regulator after overcharging thousands of customers.

Ovo, which became Britain’s second-largest energy supplier this month, reached a voluntary deal with the Office of Gas and Electricity Markets (Ofgem) after technology problems caused errors in households’ bills.

“These breaches occurred while OVO did not put enough attention on ensuring its processes and governance were capable of complying with Ofgem’s rules,” the watchdog said in a statement.

An Ofgem investigation found Ovo had also sent inaccurate annual statements to more than 500,000 customers between July 2015 and February 2018. Around 10,000 customers were not told about renewal terms when their tariffs ended.

Customers were also charged incorrectly, after Ovo underestimated consumption levels during one winter, Ofgem said. Ovo became aware of these issues but did not report most of them to the regulator

Around 8,000 customers also paid above the level of the prepayment meter cap after Ovo failed to move them on to a new tariff after their previous one ended.

Meanwhile, 17,500 prepayment meter customers were not initially charged at the correct regional level of the prepayment meter cap.

Ovo now accepts and has corrected the breaches, including refunding its overcharged customers.

It has also written off all amounts related to customers who had been charged at the wrong rates.

Anthony Pygram, director of conduct and enforcement at Ofgem, said Ovo “did not prioritise” fixing these issues for customers while its business was expanding.

He said: “Ovo Energy billed a number of its customers incorrectly and issued them with inaccurate information.

“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.”

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.”

Ofgem has also forced fellow supplier Utility Warehouse to pay out £650,00 after it overcharged customers due to a systems error.

The regulator said Utility Warehouse will refund £450,000 to 3,430 customers of its warm home discount who were overcharged after the recent energy price cap was applied.

Ofgem said the supplier will also pay a further £200,000 into the watchdog’s voluntary redress fund due to the “seriousness of the breach and the impact on potentially vulnerable customers”.

Additional reporting by agencies