Ovo Energy fined for billing issues and Utility Warehouse pays for price cap overcharging 

The UK’s soon to be second-largest energy supplier , Ovo has been fined £8.9 million by the energy regulator Ofgem for overcharging its customers.

Ovo who bought SSE’s retail business last year sent inaccurate bills to more than half a million of its customers while others didn’t receive a bill at all.

“Ovo Energy billed a number of its customers incorrectly and issued them with inaccurate information. The supplier did not prioritise putting these issues right whilst its business was expanding,” said Anthony Pygram, head of enforcement at Ofgem.

Ofgem’s investigation found:

• Inaccurate annual statements were sent to more than 500,000 customers during the period of July 2015 to February 2018. Many customers did not receive an annual statement.
• Ovo Energy underestimated consumption over one winter, meaning customers were under or overcharged.
• Around 10,000 customers were not given statements of renewal terms when tariffs were ending or were not moved to new tariffs when their existing tariff ended.
• 17,500 prepayment meter customers were not initially charged at the correct regional level of the prepayment meter cap; a further 8,000 customers ended up paying above the level of the prepayment meter cap due to Ovo not moving them to new tariffs when their existing tariff ended.
• Some of these errors led to customers being over or undercharged.

Rapid business expansion can be risky as Ovo have found out. Too many challenger energy supply companies rush to attain as many customers as possible but fail to ensure they have the resources and processes in place to ensure accurate billing and keep up with demand.

“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.” the company said in a statement.

3,430 Warm Home Discount customers are to be refunded £450,000 after Utility Warehouse overcharged them as a result of a system error caused by the introduction of the energy price cap. It will also pay Ofgem £200,000 to its voluntary redress fund.

According to Ofgem, Utility Warehouse quickly reported the issue and is in the process of refunding all those customers affected.

"While the overcharging of potentially vulnerable warm home discount customers is a serious matter which must be addressed, Ofgem has decided not to require a larger overall package or to take formal enforcement action on this occasion. This is due to the steps Utility Warehouse has taken to report the matter to Ofgem, correct the situation, and quickly put in place measures to ensure this issue will not re-occur,” said Ofgem in a statement.

The cost is likely to have been far higher if Utility Warehouse hadn’t acted so quickly highlighting the importance of energy suppliers needing to be open and honest when they do make mistakes.

In other news, challenger energy suppliers dominated the top spots in the latest Which? Customer satisfaction survey.

Octopus Energy topped the scoreboard by a considerable margin as it achieved a satisfaction score of 83%. The survey asked over 8,000 people how they felt their energy supplier performed when it came to providing customer service, accurate billing and how they handled complaints.

The biggest energy suppliers, on the other hand, all scored poorly with none of them making it into the top 20. The lowest scoring of the biggest suppliers was Scottish Power that attained a customer satisfaction score of just 51%.

The survey also highlighted that a third of British Gas customers, a quarter of EDF, Eon, Npower and SSE customers experienced problems over the last 12-months. Octopus Energy, on the other hand, had just 1 in 10 customers say they had experienced problems with its service.

“Customers shell out hundreds, sometimes thousands, of pounds a year on their gas and electricity bills so it is right that they can expect a good service from their energy supplier. If you are one of the many customers out there who feel their supplier is falling short, consider moving to one that can offer a better service as well as cheaper prices – you could save hundreds of pounds per year,” said Natalie Hitchens, head of home products and services at Which?

Robin Hood Energy tumbled down the rankings, falling from second place in 2019 to 20th. It tied with Boost Energy and Utilita.

Top 12 UK energy companies for customer satisfaction

1. Octopus Energy, 83%
2. Ebico, 79%
3. Bulb Energy, 78%
4. Pure Planet, 78%
5. People’s Energy, 77%
6. Powershop, 77%
7. Ecotricity, 75%
8. So Energy, 75%
9. Bristol Energy, 73%
10. Engie, 73%
11. Ovo Energy, 73%
12. Green Network Energy, 72%

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