Ofgem has revealed that Good Energy and OVO Energy customers have been overcharged by almost £2 million.
Errors by the two suppliers meant that customers were charged above the maximum rates allowed under the energy price cap or Energy Price Guarantee (EPG).
Good Energy were found to have charged almost 6,966 customers a total of £391,650 between January 2019 and October 2022 due to operational failures to adjust tariffs after customers had changed their payment method.
“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, said Nigel Pocklington, CEO, Good Energy.
“The issue, which we reported to Ofgem as soon as it was apparent, originated in 2019. It meant that customers who switched payment method to direct debit were not receiving their discount for doing so.
“Every customer payment method change is now being checked and the formal improvement plan we have submitted to Ofgem includes new automated processes, standards and governance to prevent any similar mistake in future.”
Good Energy has now submitted a formal improvement plan to ensure appropriate governance and processes are put in place to prevent overcharging customers again.
OVO overcharged 10,987 of its customers £1,492,917 above the EPG between October 2022 and March 2023.
An OVO spokesperson 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. We have also made a voluntary contribution to the redress fund to help support customers in vulnerable situations.”
In response, OVO and Good Energy will pay their overcharged customers a combined total of £2.7 million.
The average amount refunded to OVO customers will be £181, whilst the average for Good Energy customers will be £109.
These refunds will be automatic so the customer will not be required to take any action.
Good Energy and OVO will also pay £1.25 million and £10,000 respectively to Ofgem’s voluntary redress fund which provides support to energy customers in vulnerable circumstances.
Ofgem noted that OVO’s redress package fine would have been “considerably higher” had the supplier not engaged with Ofgem swiftly and resolved the issue “in a timely manner.”
“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,” said Dan Norton, deputy director of retail, Ofgem.
“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.”
