Utilita agrees payout after overcharging 40,000 prepayment customers

Challenger brand Utilita has agreed to pay £500,000 after it overcharged almost 40,000 prepayment customers.

Utilita first self-reported to the regulator that between May 2019 and September 2019 it had mistakenly overcharged prepayment customers.

Following its investigation into the supplier, Ofgem found the company had overcharged around 2,000 gas prepayment customers by £14,000 in total above the level of the prepayment price cap.

It also found that between July 2018 and September 2019, Utilita had overcharged around 4,600 electricity prepayment customers by around £8,700 in total above the cap.

Additionally, Ofgem found that between July 2018 and September 2019, Utilita overcharged around 33,000 electricity customers more than £105,000 above the amount they should have paid under their advertised tariff, but below the prepayment price cap.

As well as agreeing to pay £500,000 in redress, Utilita has refunded all affected customers in full.

Under the redress package agreed between Ofgem and Utilita, Utilita will make:

• A £10 goodwill payment to all existing customers who were overcharged, increasing to £15 if the customer is on the Priority Services Register
• A £140 payment to the approximately 900 existing customers affected, who had applied to Utilita for the Warm Home Discount, but were unsuccessful
• An additional payment of £45,000 to be paid into Ofgem’s Voluntary Redress Fund (currently administered by the Energy Savings Trust)

Cathryn Scott, director of enforcement and emerging issues, said: “This case sends a message to all suppliers that Ofgem will intervene if they charge customers above the level of the cap or above advertised tariffs.

“It also shows that, where appropriate, Ofgem is prepared to work with suppliers who have failed to comply with their obligations, but who have self-reported and are willing put things right quickly.”

Responding to the case Richard Neudegg, head of regulation at Uswitch.com, said: “Utilita’s overcharging affected almost 40,000 prepayment customers, a group which includes vulnerable people.

“While the amounts overcharged would likely have been relatively small for most, it’s really important that customers have confidence their supplier is charging them accurately.

“It is positive to see that Utilita has agreed to pay £500,000 in redress, and will compensate all affected customers, in particular, focusing payments towards customers likely to be in the most vulnerable circumstances.