Eighteen energy suppliers are issuing refunds and redress payments worth £10.4 million after energy regulator Ofgem found they failed to correctly protect customers’ tariff prices when they decided to switch supplier or tariff.
Most of the failures were down to suppliers not having adequate arrangements in place to make sure the protections were applied in full when customers decided to switch.
The suppliers have since agreed to refund all affected customers, and in some cases make goodwill payments, to the tune of £10.4 million. Where it has not been possible to process refunds, the suppliers have agreed to make payments to the energy redress fund.
In total, over 1 million customers were overcharged over £7.2 million.
Ofgem made clear to suppliers that customers’ tariffs are protected while either switching suppliers or tariffs and they need to ensure their systems, processes and practices are fit for purpose.
Says Anna Rossington, interim director of retail at Ofgem:
“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.”
Adds Natalie Hitchins, Head of Home Products and Services at Which?:
“It is right the regulator has intervened and sent a clear message to suppliers that this kind of behaviour is unacceptable. Firms must now act quickly to help affected customers, making it clear who is owed a refund and then doing so swiftly and without hassle.”
“Energy customers have already been left reeling by an increase to the price cap which allows suppliers to raise the prices of their default tariffs to where they were before the pandemic, risking further strain on households struggling with rising bills due to increased usage during lockdown.”
The suppliers, number of customers affected, and redress payments are as follows:
|Supplier||Number of customers affected||Total Detriment (£)||Total Redress Package|
|British Gas/ Centrica||141,415||£391,176.79||£1,269,095.47|
|E (Gas and Electricity)||20,870||£68,777.23||£ 72,772.93|
|Green Star Energy||79,083||£664,661.00||£808,351.00|
|So Energy||10,514||£59,723.56||£ 78,480.89|