OVO Energy has agreed to pay £8.9 million after Ofgem found IT problems resulted in the issuing of inaccurate information and the under and overcharging of consumers.
OVO “did not put enough attention” into ensuring its process and governance were capable of complying with Ofgem’s rules, the regulator said.
Additionally, the supplier did not self-report the majority of the issues despite being aware of them, and was "slow to put things right".
Ofgem’s investigation found that between the period of July 2015 to February 2018, inaccurate annual statements were sent to over 500,000 consumers. OVO also underestimated consumption over one winter leading to consumers being under or overcharged.
Other issues identified by Ofgem include 17,500 prepayment meter customers not being initially charged at the correct regional level of the prepayment cap and a further 8,000 paying above the level of the prepayment meter cap due to OVO not moving them to new tariffs when their existing tariff ended.
Around 10,000 customers weren’t given statements of renewable terms when tariffs were ending or weren’t moved to new tariffs following the end of their existing tariff.
OVO recently completed its £500 million acquisition of SSE’s domestic supply division, making it the second biggest UK supplier after Centrica’s British Gas.
It also announced the appointment of three new senior retail staff members, with Bill Castell joining as chief financial officer, Charlotte Eaton as chief people officer and Raman Bhatia as chief operating officer.
However, Anthony Pygram, director of conduct and enforcement at Ofgem, said OVO “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.”
OVO has since put in place measures to prevent the same issues from occurring, Ofgem said, which includes investments into technology and implementing “appropriate” compliance procedures.
The supplier has corrected breaches, which includes refunding its customers affected by overcharging on the prepayment meter cap and writing off all the amounts owing from customers who were charged at the wrong rates.
It is to pay £8.9 million into a voluntary redress fund to help vulnerable customers.
In a statement, OVO said serving its customers has always been its number one priority through providing the latest digital innovations and “excellent service” and that it is proud of its record.
“We have pioneered a new business model for the industry and have constantly innovated to simplify energy for our customers.
“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.”