E.on to pay compensation for taking 1.6 million payments early in Christmas billing blunder

On Christmas Eve, the energy giant incorrectly took direct debit payments that were supposed to be taken in January from its customers' accounts. At the time, we saw many complaints from furious customers, as it happened when finances were already stretched due to Christmas. 

While it refunded the direct debit automatically at the end of December, it left many facing extra charges from their bank.

Energy regulator Ofgem has now closed its investigation into the issue, after commitments from E.on to make goodwill payments and pay refunds for the blunder.

E.on has so far paid £55,000 directly to customers who faced bank charges, and will continue to make payments to those affected. It will also pay £627,000 into Ofgem's energy redress fund, which gives money to charities to help energy consumers in vulnerable situations.

Use our free Cheap Energy Club to check if you can save hundreds by switching provider. Or, If you find choosing a new tariff confusing, try our free Pick Me A Tariff tools to find the cheapest deal based on your preferences. 

What went wrong? 

According to Ofgem, E.on erroneously took 1.6 million customers' direct debit payments on 24 December 2020. These payments were actually due to be taken in January 2021. 

The blunder was due to a technical fault, after E.on made changes to its 'friendly credit hours' (which lets you continue using electricity after you run out of credit) for prepayment customers between Christmas and New Year. 

At the time, the supplier said it would email all those affected, but if you never heard from them and think you were affected, the easiest way to be sure is to simply check the bank account which has your direct debit set up, and see if money the was taken and refunded.

While the supplier apologised immediately for the blunder, payment refunds took a while to process due to the holidays. As a result, we saw lots of complaints from furious customers – including from one who accused the firm of "ruining Christmas".

You can get bank charges and others cost refunded – but you'll need to ask  

As part of the agreement with Ofgem, E.on has committed to continue to pay refunds and goodwill payments for bank charges, out of pocket expenses and other detriments to customers who were affected – but you'll need to make a claim.

You'll need to contact E.on directly to claim, and you'll likely need paperwork or statements showing charges, such as overdraft fees (we're just checking exactly what's required). 

While E.on automatically refunded the incorrect direct debit payment at the end of December, do check to make sure you got this back if you were affected. 

What does E.on say?

Michael Lewis, E.on UK CEO, said: "This error should not have happened and it was unfortunate that it was so close to Christmas. We apologised to those affected at the time and I apologise to them again now. As soon as we noticed the issue, we took immediate steps to put things right for our customers."

What does Ofgem say? 

Anna Rossington, director of retail at Ofgem, said: "Ofgem expects suppliers to adhere to the terms of contracts they have with customers, in particular the agreed Direct Debit payment dates. This failure is a reminder to suppliers that when making changes to their systems, they need to undertake appropriate checks to avoid any unintended consequences for customers.

"Ofgem is always prepared to work with suppliers who have failed to comply with their obligations, but who have self-reported and are determined to put things right, as E.ON has done."