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.
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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.”
Katie Binns is an award-winning journalist, and former Sunday Times writer where she spent 10 years covering news, culture, travel, personal finance and celebrity interviews. She has also written for the Times, Telegraph, i paper and Woman and Home magazine.
Her investigative work on financial abuse has examined the response of banks, the Financial Ombudsman and the child maintenance service to victims, and resulted in a number of debt and mortgage prisoners being set free.
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