Home energy supplier E.ON Next has had to pay £14.5 million to redress errors with prepaying customer bills.
Ofgem today (20 November) confirmed that the company, part of the E.ON Energy Group, would pay customers affected by E.ON Next’s failure to provide final bills and refund customer credit balances to prepayment meter customers.
E.ON Next self-reported a billing issue to Ofgem, which found almost 250,000 prepayment meter customer accounts were affected between February 2021 and September 2023.
As a result of the error, prepayment customers who moved to another supplier or terminated their contract did not receive final bills within six weeks, which is a requirement under Ofgem’s rules. The supplier then failed to make compensation payments as required under the Supplier Guaranteed Standards of Performance (GSoP).
A further 100,000 accounts identified by Ofgem that were in credit were not refunded automatically and, because customers were not informed of their balance, an average of £51 remained in their account.
E.ON Next has agreed to the £14.5 million payment, split across £4.7 million in credit refunds, £6.6 million in GSoP compensation payments and £3.2 million compensation to affected customers. Affected customer accounts receive an average of £144.
In addition to the compensation and redress package, the energy supplier has agreed to write off debt held by almost 150,000 prepayment meter customers who closed their accounts with the supplier between February 2021 and September 2023.
One of Ofgem’s responsibilities is to protect customers from supplier failings such as these. Beth Martin, director for consumer protection and competition at Ofgem called E.On Next’s failure “unacceptable” and pointed out that prepayment meter customers are more susceptible to financial difficulties.
She continued: “E.ON Next has demonstrated an understanding of the significant impact this issue may have had on its customers, and it is encouraging that they self-reported the issue and have worked with us to resolve it and compensate affected customers to put things right. The action to write off debt will also offer affected households peace of mind.”
All affected customers will be contacted by E.ON Next and payments due to any accounts that cannot be traced will go to the Energy Industry Voluntary Redress Fund, which Ofgem has appointed the Energy Savings Trust to oversee.
The news comes just under a week after Ofgem announced that non-domestic energy supplier Opus Energy had agreed to pay over £7 million in refunds, redress and goodwill payments for overcharging thousands of business customers.
