OVO Energy has agreed a settlement worth more than £10million with the industry regulator Ofgem.
It comes after an investigation found vulnerable customers using prepayment meters faced a "clear risk of harm" because of failures in the supplier’s monitoring systems.
Ofgem announced on Wednesday that OVO had breached consumer protection rules through inadequate oversight of prepayment meter customers, including households listed on the priority services register.
They concluded the company’s failings breached regulations specifically intended to safeguard vulnerable consumers.
The settlement comes while OVO is being acquired by German energy giant E.ON in a deal set to create one of Britain’s largest energy suppliers.
OVO Energy agrees £10million settlement after Ofgem finds vulnerable customers faced risk of harm.
|GETTY
The financial package includes several measures aimed at addressing the regulatory breaches identified during the investigation.
OVO will pay £7million into Ofgem’s voluntary redress fund, which allows companies that breach regulatory requirements to make payments alongside or instead of formal financial penalties.
The supplier will also provide £3.4million in credit and debt relief to vulnerable customers, which Ofgem said would replace direct compensation payments.
A further £1.1million is being distributed to customers living in the Scottish Highlands and Islands.
That separate payment follows compliance concerns raised after rural households in those regions were denied proper access to engineer support for more than two years between January 2022 and April 2024.
Cathryn Scott, director of market oversight and enforcement at Ofgem, said: "It is clear that OVO fell short in its support of vulnerable prepayment meter customers, and it's right that they've taken action to improve their processes."
Ms Scott said prepayment meters worked effectively for many customers who valued having greater control over their energy spending, but added that robust monitoring remained essential for protecting vulnerable households.
The regulator’s investigation examined how OVO managed existing prepayment meter customers and uncovered repeated failures in recording interactions with consumers.
The settlement reflects both the historical failings identified by Ofgem and the measures the supplier has since implemented.
| GETTYOfgem found that essential checks and evidence gathering were not always carried out correctly.
The watchdog also identified problems with staff training materials, describing them as "unclear, inconsistent, and contained conflicting guidance".
The regulator concluded that those failures increased the risk of signs of vulnerability being overlooked.
An OVO spokesman said: "Ofgem's investigation examined how we supported prepayment meter customers between 2018 and 2024."
E.ON is currently in the process of acquiring OVO through a deal that will create one of the UK’s largest energy providers.
| E.ON"We accept that some of our historic processes fell short of expected standards, and we are sorry for that."
The spokesman added that customer safety remained a priority for the company and acknowledged that improvements had been required.
OVO said it had since introduced changes to strengthen its policies and internal systems, including a new Safe and Reasonably Practicable policy designed to better identify and support vulnerable customers.