Blog Post

2020 could be a record year for fines imposed on energy suppliers

Richard Simmonds • Dec 04, 2020

New analysis of Ofgem data is suggesting that 2020 could be the worst year on record for the number of fines imposed on energy suppliers with over £64.9 million being issued – the second-largest amount seen since the £71.9 million paid in 2015. 

£389 million paid out since 2010

The data which was analysed by energy switching site Flipper shows that since 2010, more than 20 energy suppliers have been fined by the energy regulator with the biggest being imposed on British Gas and Eon who had to fork out more than £45 million each.

The former ‘Big Six’ are the biggest culprits with the likes of Npower and Eon both paying out more than £35 million over the 10-year time period. 

Smaller suppliers too have been fined with the most recent action taken by Ofgem being against Utilita who had to pay out £500,000 for overcharging its customers. 

When added, energy suppliers have had to pay back the equivalent of £100,000 a day, every day, for the last 10 years due to non-compliance with regulations.

 'This figure is shocking and these are not minor issues. Ofgem only investigate where it believes a company has breached their licence conditions, consumer protection law or have acted anti-competitively,' said Mark Gutteridge, managing director of Flipper.

It’s not just the energy suppliers that have been hit with fines. Energy network companies have also been fined resulting in rising energy bills.

This year, Intergen was fined £37 million for submitting misleading Physical Notification that led to the manipulation of the market that resulted in the company deriving profits by pushing up the price of energy.

Most common causes 

The most common issues include incorrect energy billing, wrongly charging customers exit fees, switching customers to expensive standard tariffs and failing to comply with licencing conditions.


Mis-selling took the number one spot for generating the biggest fines, totalling £40.5 million and poor complaints handling came second with £37.3 million. Incorrect energy billing resulted in fines of £25.7 million.


Poor switching practises meanwhile resulted in total fines of £10.5 million.


Also read: How can Energy Suppliers reduce Energy Billing errors?

Reduce the risks with Dyball Associates

It doesn’t have to be this way. Energy suppliers continue to land in hot water for issues that can be remedied.


The challenges posed by Energy billing for example can be tackled with software such as Dyball Associates CRM system.


With it, an energy supplier can manage customer energy bills by exception, automate bill runs through the system and any errors and exceptions are quarantined so they can be resolved by their billing team. This will reduce the chances of customers receiving erroneous energy bills and reduce the likelihood of incurring the wrath of the energy regulator and angry customers alike.


Dyball can also help energy suppliers onboard new customers quickly and efficiently via its customer switching portal and our customer self-service portal allows energy suppliers to empower their customers to take greater control and responsibility of their energy supply.


Further Reading

Yorkshire Energy latest energy supplier to cease trading as Covid-19 pressures mount


Energy Suppliers join new Vulnerability Commitment


Ofgem and Utilita Energy clash over smart meter rollout warning


Dyball Associates are proud to help new supply businesses successfully launch in the UK market.

 

Through our energy market consultancy services, and the software we’ve developed, we’re supporting new UK electricity and gas suppliers get set up and start supplying.

 

For more information on how to start and manage an energy company, get in touch with Dyball Associates today.


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