Ofgem fines Ovo after thousands of customers incorrectly billed

Hundreds of thousands of Ovo Energy customers were inaccurately billed over a period of 5 years due to failings in IT, Ofgem has revealed.

As a result of the failings, the company has apologised to its customers and agreed to pay almost £9 million into the voluntary redress fund.

Specifically, more than 500,000 customers were sent inaccurate annual statements between July 2015 and February 2018, with many not actually receiving a statement.

In addition, Ovo underestimated energy consumption over one winter, meaning customers were inaccurately charged.

More failings included:

• Around 10,000 customers were not given statements of renewal terms when tariffs were ending or were not moved to new tariffs when their existing tariff ended;
• 17,500 prepayment meter customers were not initially charged at the correct regional level of the prepayment meter cap (PPM); a further 8,000 customers ended up paying above the level of the prepayment meter cap due to Ovo not moving them to new tariffs when their existing tariff ended.

Ofgem said Ovo did not self-report the majority of the issues despite being aware of them and was “slow to put things right”.

The supplier has since accepted and corrected the breaches, including refunding  customers affected by overcharging on the PPM cap. Furthermore, it has written off all amounts owing from customers who had been charged at the wrong rates.

It will pay £8.9 million into the voluntary redress fund to help vulnerable customers and Ofgem has issued two £1 fines, one on its electricity arm and the other on its gas business.

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.”

Writing in a blog this morning Ovo apologised “unreservedly” to its customers and said all customers who had been overcharged had been refunded.

It added: “Throughout the whole investigation, we’ve worked really closely with Ofgem who’ve made it clear they welcome the approach we’ve taken to fixing things.

“We’re very proud of what we do – and have spent a lot of time reflecting on this situation to make sure we learn from our mistakes.

“Again, we’d like to say sorry to everyone who was affected and reassure you once more that we’re 100 per cent committed to providing the very best customer experience for each and every one of you.”