MSE News

Ovo Energy to pay £8.9 million after overcharging customers and sending wrong info

Ovo Energy has agreed to pay £8.9 million after issuing inaccurate or incomplete information to 100,000s of customers, and for under and overcharging customers due to IT issues. 

The firm – which purchased SSE earlier this month – has admitted a series of failings in its IT and compliance processes over a period of five years. As a result, customers were sent incorrect information in their annual statements, or weren't sent necessary documents when their tariffs were ending. 

Some customers were also under or overcharged due to the company inaccurately estimating winter energy consumption or incorrectly applying the prepayment meter price cap. 

Those who were overcharged on the prepayment price cap have now been refunded, while all amounts owed by customers charged the wrong rates have been written off. But the energy regulator says Ovo was slow to put things right, and didn't report most of the issues despite being aware of them. 

Ovo will now pay £8.9 million into a voluntary redress fund, used to help vulnerable energy customers. 

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What went wrong? 

An investigation by the energy regulator Ofgem found a series of breaches from Ovo Energy. These were: 

  • More than 500,000 customers were sent inaccurate annual statements between July 2015 and February 2018. Others didn't receive an annual statement at all. 

  • About 10,000 customers didn't receive statements showing their renewal terms when their tariffs were ending, or weren't moved to new tariffs when their existing ones ended. 

  • 17,500 prepayment meter customers weren't charged at the correct regional level of the price cap, leading some to be under or overcharged. 

  • 8,000 prepayment meter customers paid above the level of the price cap because they weren't moved to new tariffs when their existing tariffs ended. 

  • Some customers were under or overcharged due to Ovo underestimating winter consumption. We've asked Ovo how many customers were affected by this, and will update this story when we hear back. 

Ovo says that any customer who was overcharged has now been refunded. Customers who were undercharged won't be asked to make up the shortfall. 

What does Ovo say? 

An Ovo spokesperson said: "Ovo Energy holds itself to high standards, but we have not always got it right. We accept Ofgem’s findings of issues regarding estimation processes, information formatting and pricing errors."

Anthony Pygram, director of conduct and enforcement at Ofgem, said: "Ovo Energy billed a number of its customers incorrectly and issued them with inaccurate information. 

"The supplier did not prioritise putting these issues right whilst its business was expanding. Our enforcement action sends a strong message that suppliers must get basic services right for all their customers. Ovo Energy has accepted the breaches and put processes in place to comply with the rules in future."

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