E.On Next, Good Energy and Octopus Energy have paid £8 million, including over £6 million in compensation to customers, after lengthy delays in producing final bills to more than 100,000 customers when they switched suppliers.
The regulator Ofgem said the three suppliers either missed or delayed compensation payouts that were due when they did not provide a final bill within six weeks, as required when a customer switches to another provider.
Under rules brought in three years ago, customers are entitled to a £30 payment each if a final bill is not produced in six weeks, with a further £30 due if the compensation is not provided within another 10 working days.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Ofgem said the firms either missed or delayed compensation payments worth £6.3 million, with some of the affected households waiting over a year to receive redress.
E.On Next paid the bulk of the fine, forking out £5.5 million to almost 95,000 customers, while Octopus paid around £750,000 to 19,000 customers and almost 350 Good Energy customers received a combined total of £18,000.
It means the three firms will pay about £60 a customer in compensation to more than 100,000 households affected.
The suppliers also paid an extra £1.7 million to customers or the energy industry voluntary redress scheme (EIVRS), which supports vulnerable consumers, of which E.On Next paid £1.3 million.
All three suppliers have also updated their processes and systems to ensure final bills are produced within six weeks from now on.
Neil Kenward, director for strategy at Ofgem, said: “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.
“As the energy market starts to recover, we’ll likely see a return to more switching, and this action is a reminder to suppliers that they need to make switching as easy and convenient as possible for their customers, and where they cause undue delay, pay compensation swiftly.”
Ofgem added that the switching standards will be increasingly important this year, as falling energy bills are expected to drive switching once again as customers shop around for the best deals.
Emily Seymour, energy and sustainability editor at consumer group Which?, said: “It is deeply disappointing that not only have major suppliers been missing targets for issuing customers with their final bills, but they’ve also neglected to pay the resulting compensation due to customers.”
-
M&S shares shift from frumpy to fabulous as pre-tax profits are up by 56%M&S is performing strongly and has announced it will pay a dividend for the first time since the pandemic.
-
The rise and fall of Sam Bankman-Fried – the “boy wonder of crypto”
Why the fate of Sam Bankman-Fried reminds us to be wary of digital tokens and unregulated financial intermediaries.
-
Halifax: House price slump continues as prices slide for the sixth consecutive month
UK house prices fell again in September as buyers returned, but the slowdown was not as fast as anticipated, latest Halifax data shows. Where are house prices falling the most?
-
Rents hit a record high - but is the opportunity for buy-to-let investors still strong?
UK rent prices have hit a record high with the average hitting over £1,200 a month says Rightmove. Are there still opportunities in buy-to-let?
-
Pension savers turn to gold investments
Investors are racing to buy gold to protect their pensions from a stock market correction and high inflation, experts say
-
Where to find the best returns from student accommodation
Student accommodation can be a lucrative investment if you know where to look.
-
Best investing apps
We round up the best investing apps. Looking for an easy-to-use app to help you start investing, keep track of your portfolio or make trades on the go?
-
The top funds to invest in - November 2023
Tips Investors are focused on income strategies and FTSE heavyweights. We look at what investors have been adding to their portfolios in the last month
-
The world’s best bargain stocks
Searching for bargain stocks with Alec Cutler of the Orbis Global Balanced Fund, who tells Andrew Van Sickle which sectors are being overlooked.
-
Revealed: the cheapest cities to own a home in Britain
New research reveals the cheapest cities to own a home, taking account of mortgage payments, utility bills and council tax
