More than one million households will receive refunds of £10.40 on average after energy suppliers overcharged them when they requested to switch.
Under Ofgem rules, if customers request to switch supplier or tariff after a price increase, their prices should be safeguarded during the switching process, which takes 16 days on average for electricity and 18 days for gas.
However, the regulator has revealed that between 2013 and 2020, 18 energy suppliers overcharged customers by a total of £7.2 million after they requested to switch.
Several suppliers self-reported the issue to the regulator which then requested all suppliers self-assess their practices. 18 suppliers, including some of the UK’s largest, found they had breached the rules. Ofgem found that most of these suppliers didn’t have adequate arrangements in place to ensure protections were applied in full when customers decided to switch.
Customers impacted include:
The suppliers have agreed to refund all affected customers and in some cases issue goodwill payments, for a total payout of £10.4 million.
OVO Energy, the UK’s second-largest supplier, will pay out the most, £2.8 million, to 240,563 current and former customers.
Scottish Power overcharged 157,236 by £1.5 million and will issue refunds and compensation totalling £1.97 million.
Shell Energy, known as First Utility during much of the period in which the failures occurred, will pay £1.22 million to 225,823 current and former customers.
British Gas, the country’s largest supplier, is issuing payments totalling £1.27 million to the 141,415 customers it overcharged around £390,000.
Other implicated suppliers include Bristol Energy, Bristol City Council’s supplier which was recently sold to British Gas; Big Six members E.ON, EDF, Npower and SSE; Green Star Energy, which is now owned by Shell; and green challenger Octopus Energy. See below for the full list.
These suppliers will contact customers owed money and issue refunds automatically. If you believe you’re owed a refund or redress and haven’t received it, perhaps because your old supplier no longer has your contact details, you should raise a complaint with that supplier.
When suppliers can’t locate former customers to refunds them, they’ll make payment into the Energy Saving Trust’s redress fund, which supports charities helping energy customers in vulnerable situations.
Anna Rossington, interim director of retail at Ofgem said: “Customers should have confidence in switching and not be overcharged when doing so. This case sends a strong message to all suppliers that Ofgem will intervene where customers are overcharged and ensure that no supplier benefits from non-compliance.
“It also shows that, where appropriate, Ofgem is prepared to work with suppliers who have failed to comply with the rules, but who are willing to self-report issues and put things right for their customers.”
Suppliers that overcharged customers
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