Energy suppliers Octopus Energy, Good Energy and E.On Next have a paid a total of £8 million for delaying or failing to make statutory compensation payments owed to energy customers.
According to energy regulator Ofgem, the three domestic energy suppliers either missed or unduly delayed compensation payments. These are normally due if a supplier does not provide a final bill within six weeks when a customer switches to another provider.
These payments have been brought forward via the application of their Guaranteed Standards of Performance (GSOP). According to Ofgem, the regulations “require suppliers to meet certain standards of performance for their customers, including when energy supplier switches are delayed, customers are erroneously switched, or final bills are produced too late, all things which can cause customers unnecessary stress and potentially financial harm.”
If a supplier fails to meet this standard then they must provide the affected customer a standard compensation payment of £30. If the supplier fails to compensate the customer within the first 10 working days after the six week period then the customer is due an additional standard GSOP compensation payment of £30.
Ofgem stated that as a result of the delayed or missed statutory compensation payments, over 100,000 customers were affected. The regulator said it has “worked with these suppliers to ensure all affected consumers received the payments to which they were entitled, as well as additional compensation of £1.7 million to customers or the Energy Industry Voluntary Redress Scheme (EIVRS).”
Ofgem’s data indicates that E.On Next had the highest amount of total customers affected at 94,928. This resulted in the energy supplier offering a total redress package of £6,865,220. This was followed by Octopus Energy with 19,359 customers affected and a total redress package of £1,140,195. Good Energy had the least amount of customers affected with 347 resulting in a total redress package of £29,010 being paid to customers.
All three suppliers have now updated their billing processes and systems to ensure payments will now be made in line with the regulations, Ofgem said.
“Ofgem introduced these standards to make sure customers get the service they deserve when switching energy supplier. Our rules mean that where energy companies drag their heels, customers are automatically compensated. We won’t hesitate to hold energy companies to account, as we have done today,” said Neil Kenward, director for Strategy at Ofgem.
“As the energy market starts to recover, we’ll likely see a return to more switching, and this action is a reminder to suppliers that they need to make switching as easy and convenient as possible for their customers, and where they cause undue delay, pay compensation swiftly.”