Energy Firm Pays Heavy Price For Overcharging

Written By Unknown on Jumat, 03 April 2015 | 11.46

Energy firm E.ON is to hand £7.75m to Citizens Advice for customers who were overcharged after price rises.

The sum is on top of the £400,000 E.ON has already paid back money to others who may have been affected.

Regulator Ofgem said the penalty reflected the company's "repeated failing" on billing rules.

It wrongly imposed exit fees and overcharged customers following price rises in January 2013 and January 2014

Under Ofgem rules firms are not supposed to apply exit fees if a customer signals their intention to move supplier within the standard 30-day notice period of a price increase.

This is the case even if the switch occurs after the rise.

Sarah Harrison, Ofgem's senior partner in charge of enforcement, said: "(Our) rules give customers a chance to avoid exit fees and higher costs when suppliers put up prices.

"These are important customer protections and it is vital that suppliers play by the rules so customers are encouraged to engage in the market."

In November 2012, E.ON, one of the UK's six biggest energy suppliers, was required to pay £1.7m for similar failings.

Ms Harrison commented: "It's absolutely unacceptable that E.ON failed to provide these vital customer protections yet again and this persistent failure is the reason for the high penalty."

The errors in respect of price rises in January 2013 and 2014 affected direct debit and standard credit customers. The average amount paid back was around £8 and £12 respectively.

The mistakes also resulted in around 11,500 prepayment customers - traditionally the poorest - missing out on an average refund of £3.42.

E.ON is aiming to reimburse them by the end of April.

Last May E.ON was ordered to pay back a record £12m for mis-selling.


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