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Ten energy suppliers in the UK have been compelled to pay out approximately £7 million in compensation and refunds to over 34,000 customers who were incorrectly overcharged due to a billing error, according to the energy industry regulator Ofgem, Daily Dazzling Dawn understand.
The watchdog revealed today that the significant sum has been distributed to customers who were erroneously billed above the permitted price cap. The error, which spanned from January 2019 to September 2024, disproportionately affected households with more than one electricity meter point at their properties. While suppliers are permitted to apply multiple standing charges in such cases, Ofgem found that the error led to some customers being "erroneously charged more than is allowed under the price cap."
The UK's largest energy supplier, Octopus Energy, was among the affected companies, having refunded £2.64 million to over 20,000 customers and made an additional £546,278 in goodwill payments. Utility Warehouse faced an even larger refund bill, paying out over £2 million to 8,272 of its customers who were overcharged.
The billing error also impacted customers of several other prominent energy providers, including Ovo Energy, So Energy, Outfox The Market, Ecotricity, E.On Next, Tru Energy, Rebel Energy, and EDF Energy.
Charlotte Friel, director of retail pricing and systems at Ofgem, expressed the regulator's expectation for accurate billing processes among all suppliers. "We expect all suppliers to have robust processes in place so they can bill their customers accurately," she stated.
While acknowledging that errors occurred, Friel noted the prompt resolution of the issues and the ongoing refunds to affected customers. "While it’s clear that on this occasion errors were made, thankfully, the issues were promptly resolved, and customers are being refunded," she added.
The outcome serves as a stern reminder to all energy suppliers about the critical importance of correctly implementing the price cap and conducting thorough due diligence. "Today’s outcome serves as a reminder to all energy suppliers that they must implement the price cap properly and do their due diligence," Friel emphasized.
Ofgem also highlighted its willingness to take action when suppliers fail to adhere to regulations. "It also shows that, where appropriate, Ofgem is prepared to work with suppliers that fail to comply with our rules," Friel concluded.
The regulator confirmed that all ten energy suppliers involved have since updated their internal systems and processes to prevent the recurrence of this overcharging issue in the future.
Ten UK energy suppliers, including Octopus and Utility Warehouse, have paid out £7 million in refunds and compensation to over 34,000 customers who were overcharged due to a billing error.
