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1,000s of Utility Warehouse customers owed average payments of £130 due to overcharging

Energy firm Utility Warehouse is to pay out £450,000 in refunds and compensation, after it overcharged potentially vulnerable customers last year.

A system error meant the firm had overcharged 3,430 customers by a total of £150,000 between January and November 2019.

The affected customers were all receiving the warm home discount, which gives people on pension credit or certain benefits money off their winter energy bill (more on this below). They are now being refunded, as well as being given compensation worth double the original overcharge.

The average payment will be £132 – made up of an average refund of £44 and compensation of £88 – and will be applied to customers' January bills.

Utility Warehouse will also be paying £200,000 into the energy regulator's voluntary redress fund, which helps vulnerable consumers, bringing its total payments to £650,000.

Energy regulator Ofgem said it had chosen not to take formal enforcement action against Utility Warehouse in this case because the firm had proactively reported the issues and acted quickly to correct the problem and take steps to prevent it happening again.

See our Housing & Energy Grants guide for more info on getting help with your energy bills. And to see how much you could save by switching your energy provider, do a full market comparison via our free Cheap Energy Club.

I'm a Utility Warehouse customer – what can I do?

Utility Warehouse says those affected will receive their refund and compensation automatically on their January bill.

And it says that it's already written to affected customers who have since switched away from Utility Warehouse, enclosing a cheque for their refund and compensation.

But if you think you're affected and haven't heard from Utility Warehouse, you can get in touch by calling 0333 777 3 212, emailing via its contact form or writing to Utility Warehouse, Network HQ, 508 Edgware Road, The Hyde, London NW9 5AB.

What is the Warm Home Discount?

The Warm Home Discount scheme requires suppliers, by law, to help vulnerable people in the UK pay for their energy. The money isn't paid to you, it's a £140 rebate applied to your electricity bill between September and March.

There are two ways to qualify, with a different process for each.

  • If you get pension credit, you may get the discount automatically. If, as of 7 July 2019, you received the guarantee credit element of pension credit and your name (or your partner's) is on the bill, you're in what's known as the 'core group'.

    Provided your energy supplier is part of the scheme, you should have received a letter (usually sent between October and December 2019) confirming when the £140 will be deducted from your electricity bill. The letter may also ask you to contact a helpline to confirm your details if required – the deadline to do this is 28 February 2020.

  • If you're on certain benefits, you may qualify – but you'll need to apply. If you don't qualify for the above, you might be able to apply under what's known as the 'broader group' criteria.

    This covers those who have a low income and meet certain criteria – we've full details in our Housing & Energy Grants guide. If you're eligible, you'll need to apply directly to a participating supplier.

You can check your eligibility by calling the Warm Home Discount helpline on 0800 731 0214 before 28 February 2020.

What does Utility Warehouse say?

A Utility Warehouse spokesperson said: "A small number of affected customers were mistakenly categorised within the price cap, which led to an overcharge.

"As soon as we realised the mistake we reimbursed them for the overcharge, gave them an additional credit on their account and put them onto the correct tariff.

"We have been working closely with Ofgem since identifying the issue and have also made a significant voluntary contribution to the Energy Redress Scheme, which helps consumers in vulnerable situations, those negatively impacted by energy company issues and funds the development of innovative energy products and services."

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