Blog Post

18 Energy Suppliers told to refund a million energy consumers by Ofgem

Richard Simmonds • Mar 02, 2021

The energy regulator Ofgem has ordered 18 energy supply companies to pay £10.4 million to consumers after it emerged they overcharged their customers or left them at risk of high energy bills -after they had requested to switch to a cheaper tariff.

Suppliers of all sizes guilty

Ofgem said that gas and electricity suppliers guilty of overcharging range from the former ‘Big Six’ companies such as British Gas and Npower to smaller challenger suppliers such as Bristol Energy.

The regulator accuses the companies of failing to protect customer tariff prices when they decided to switch to a cheaper energy tariff or to a new supplier.

Under price protection rules a customer’s tariff price is safeguarded when they request a switch or move to a cheaper alternative.

Ofgem said the following customers are affected:

Those on a standard variable tariff who switched to another supplier but did not have their variable tariff price protected during the switch
Customers on a fixed-term tariff who switched to another supplier but did not have their fixed term tariff protected during the switch
Customers on a fixed-term tariff who moved to another tariff with their supplier but did not have their fixed-term tariff protected during the switch.

Also read: Energy Billing – How does it work?

Impact on switching?

Such headlines do little to encourage consumers switching energy supplier as there are already plenty of people who believe that switching will create more issues than its worth.

Ofgem, consumer groups and the government have repeatedly tried to encourage consumers to switch to get the best deals, but data released in February showed that the switching numbers fell sharply in January.

“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.” said Anna Rossington, interim director of retail at Ofgem.

The energy suppliers being forced to pay out the biggest compensation bills include Ovo Energy with a bill of £2.8 million, Scottish Power with £2 million, British Gas with £1.3 million and Shell with £1.2 million.

Also read: Energy Switching fell to lowest level since 2018 in January but Energy Price Cap hike likely to spur a rebound

Rule Breakers

All of the former ‘Big Six’ were shown to break the rules as well as 12 smaller suppliers when customers came to them requesting to move to a cheaper energy tariff or new supplier.

The full list of suppliers that broke the rules is:

Bristol Energy - 12,617 customers affected
British Gas/ Centrica - 141,415 customers affected
E (Gas and Electricity) - 20,870 customers affected
E.On - 28,126 customers affected
EDF - 79,083 customers affected
Engie - 9,061 customers affected
ESB Energy - 1,961 customers affected
Green Star Energy - 79,083 customers affected
npower - 2,030 customers affected
Octopus Energy - 19,712 customers affected
Orbit - 723 customers affected
OVO Energy - 240,563 customers affected
PFP Energy - 5,347 customers affected
Scottish Power - 157,236 customers affected
Shell - 225,823 customers affected
So Energy - 10,514 customers affected
SSE - 132,620 customers affected
Utility Warehouse - 2,723 customers affected

Each of the listed suppliers must now contact the affected customers regarding the redress payments, however, if a company cannot trace a customer the energy suppliers must then pay what is owed into Ofgem’s redress fund.

Also read: End of the 'Big Six' Energy Suppliers as the rise of challengers’ force Ofgem reclassification

Use a CRM to avoid such mistakes

Using the right software is one of the major ways an energy supplier can avoid making mistakes such as the one mentioned above.

Not only do such errors impact upon a company’s reputation but also financially.

To make the energy billing process as efficient as possible, energy suppliers should adopt an energy billing software and CRM system. This allows the company to deliver a better customer experience and reduce the chance or errors.

The main benefits of a CRM include:

Minimise the need for manual interaction
Deliver a seamless customer experience
Get things right, first time

Dyball Associates energy supplier CRM system incorporates an energy billing system that allows the scheduling and ad hoc bill production to the suppliers branded billing templates.

Bills can be run via automation through the system and any errors and exceptions are quickly identified and quarantined to be resolved by the billing team.

In short, our CRM helps an energy supply business automate its billing and collection processes.

Also read: How a CRM makes Energy Billing easy for Energy Suppliers

Dyball Associates will keep you informed of the latest changes and our team of energy market consultants can guide you through the steps to enter the UK energy market. Whether you’re looking for electricity and gas systems or support on starting an energy supply company, Dyball Associates can help.