Three energy suppliers pay £8 million for customer compensation failures

Energy regulator Ofgem has ordered three energy firms to pay £8 million, including over £6 million in compensation to customers, after failing to provide final bills within six weeks of a customer switching away.

E.On Next, Good Energy and Octopus Energy either missed or unduly delayed the compensation payments, which are due if a supplier does not provide a final bill within the timeframe when a customer switches to another provider.

This is the first time Ofgem has taken compliance action on Guaranteed Standards of Performance (GSOP) compensation delays in relation to final billing performance standards.

The three companies have paid about £60 per customer in compensation to the 100,000+ affected by the missed payments.

A further £1.7 million will be paid into Ofgem’s voluntary redress fund, which supports charities to deliver energy-related projects, such as helping energy consumers in vulnerable situations.

Neil Kenward, Director for Strategy at Ofgem, said: “Ofgem introduced these standards to make sure customers get the service they deserve when switching energy supplier. Our rules mean that where energy companies drag their heels, customers are automatically compensated. We won’t hesitate to hold energy companies to account, as we have done today.”

The GSOP regulations, mandated by Ofgem, entitle an affected customer to a ‘Standard’ one-off compensation payment of £30 if a final bill is not produced within six weeks. If this compensation is not provided within a further 10 working days, a customer is due an ‘Additional Standard’ GSOP compensation payment of another £30.

During compliance engagement with the companies, Ofgem established that the three suppliers either missed or unduly delayed GSOP compensation payments worth £6,305,925. Over 100,000 customers were affected, and some waited more than a year to receive compensation.

The biggest portion of that sum was met by E.On Next, paying a total of £5.5 million to almost 95,000 customers. Octopus Energy paid approximately £750,000 to 19,000 customers, and almost 350 Good Energy customers received a combined total of £18,000.

All three suppliers have now updated their billing processes and systems to ensure payments will now be made in line with the regulations. Affected customers do not have to do anything to claim their refund; the payments have now been made by the suppliers involved.