Utilita to pay £500,000 for overcharging customers

Overcharging

Ofgem revealed that the energy bills for the 40,000 affected customers were £125,000 higher than they should have been between May and September 2019.

Utilita overcharged 6,600 of its prepayment customers by about £22,700 over the prepayment price cap. It also overcharged about 33,000 customers £105,000 more than the amount they should have paid under their advertised tariff, but below the prepayment price cap.

Utilita avoided being fined by self-reporting itself to the energy regulator when the mistake was discovered.

Also read: Ofgem to introduce new rules to help customers struggling with energy bills- what does this mean for energy suppliers?

Compensation

As well as agreeing to pay £500,000 in redress, Utilita has refunded all of the customers affected in full.

Under the redress package agreed between Ofgem and Utilita, Utilita will make:

• A £10 goodwill payment to all existing customers who were overcharged, increasing to £15 if the customer is on the Priority Services Register. This register ensures appropriate support to customers in vulnerable circumstances.
• A £140 payment to the approximately 900 existing customers affected, who had applied to Utilita for the Warm Home Discount (WHD) but were unsuccessful.
• An additional payment of £45,000 to be paid into Ofgem’s Voluntary Redress Fund (currently administered on Ofgem’s behalf by the Energy Savings Trust).

Also read: How can energy suppliers reduce energy billing errors

“I would like to apologise unreservedly to all customers who were temporarily out of pocket. I am sorry that we did not issue prompt refunds during the period in question. We know we can always improve and will always take on board criticism of any legitimate failings,” said Utilita boss Bill Bullen.

“Ofgem closely monitors suppliers’ compliance with the price cap, which ensures consumers pay a fair price for their energy. This case sends a message to all suppliers that Ofgem will intervene if they charge customers above the level of the cap or above advertised tariffs. It also shows that, where appropriate, Ofgem is prepared to work with suppliers who have failed to comply with their obligations, but who have self-reported and are willing put things right quickly,” said Cathryn Scott, Director of Enforcement and Emerging Issues.

Further Reading

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