Energy crisis: Two firms to refund £2.7m to thousands after customers overcharged
Published: 18/05/2023- 16:09
Two major energy firms are set to pay out £2.7million to thousands of customers who were mistakenly overcharged.
Regulator Ofgem discovered that Good Energy and OVO Energy had charged over the maximum rates allowed under the energy price cap and energy price guarantee.
The energy price cap limits the maximum amount suppliers can charge for each unit of energy and was first put in place in January 2019 to stop companies overcharging customers.
In 2022, the Government also introduced the energy price guarantee to further protect households from soaring energy prices.
The energy price cap limits the maximum amount suppliers can charge for each unit of energy
Good Energy was found to have overcharged nearly 7,000 customers a total of £391,650 between January 2019 and October 2022.
According to Ofgem, the provider failed to adjust tariffs after customers changed their payment method.
OVO Energy also overcharged almost 11,000 customers a total of £1,492,917 between October 2022 and March 2023.
Any customers affected will be automatically refunded so don't need to claim any funds.
On average, Good Energy customers will receive £109 and OVO customers will get an average of £181.
In addition, Good Energy will also need to pay a further £1.25million to Ofgem for failing to apply price protections to customers.
While OVO is set to pay £10,000 to the regulator for reporting issues.
Dan Norton, deputy director of retail at Ofgem, said: “Protecting consumers is always our top priority, and we expect suppliers to ensure customers pay no more than the level of the price cap or energy price guarantee – schemes put in place with the very purpose of helping people.
On average, Good Energy customers will receive £109 and OVO customers will get an average of £181
"It is totally unacceptable that Good Energy and OVO Energy customers were overcharged, particularly at a time that is already so challenging and stressful for consumers across the UK.
"Energy suppliers should hear this loud and clear: we expect suppliers to act with the utmost care and integrity.
"We will continue to hold them to account if they do not meet their customer protection or reporting obligations."
Both Good Energy and OVO Energy have apologised for the errors.