Ofgem has ordered three energy providers to pay compensation to customers after they failed to provide a final bill within six weeks after the customers switched to a new provider.
Thousands are now due compensation payments worth up to £60 as they either missed or unduly delayed their duties.
The payment is for any switching delays that occurred in May 2020.
Ofgem has urged any customers who have not received their compensation to contact their energy supplier at the time, such as E.On Next, Good Energy and Octopus Energy.
E.On Next paid a total of £5.5million to almost 95,000 customers for failing to act within the time frame.
Ofgem Energy regulator Ofgem brought in additional ‘Guaranteed Standards of Performance’ (GSOP) to reduce delays in final billing in May 2020.
The rules ensure that suppliers provide compensation to customers when:
- energy supplier switches are delayed
- customers are erroneously switched, or
- final bills are produced too late, all things which can cause customers unnecessary stress and potentially financial harm.
The standards will be increasingly important this year with switching activity predicted to increase again as the energy market recovers and customers begin to shop around for cheaper tariffs.
Neil Kenward, Director for Strategy at Ofgem, said: “Ofgem introduced these standards to make sure customers get the service they deserve when switching energy supplier.
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“Our rules mean that where energy companies drag their heels, customers are automatically compensated. We won’t hesitate to hold energy companies to account, as we have done today.
“As the energy market starts to recover, we’ll likely see a return to more switching, and this action is a reminder to suppliers that they need to make switching as easy and convenient as possible for their customers, and where they cause undue delay, pay compensation swiftly.”
These GSOP entitle an affected customer to a ‘Standard’ one-off compensation payment of £30 if a final bill is not produced within six weeks.
If this compensation is not provided within a further 10 working days, a customer is due an ‘Additional Standard’ GSOP compensation payment of another £30.
The three suppliers either missed or unduly delayed GSOP compensation payments worth £6,305,925.
Over 100,000 customers were affected, and some waited more than a year to receive compensation.
Ofgem ensured customers were able to get their money as Octopus Energy paid approximately £750,000 to 19,000 customers, and almost 350 Good Energy customers received a combined total of £18,000.
Commenting on Ofgem’s publication regarding its Guaranteed Standards of Performance, an E.ON spokesperson said: “Last year, we told Ofgem that our own internal checks uncovered that we had not added a Guaranteed Standards Of Service (GSOS) compensation payment for final bills which were sent out to some of our customers after the stipulated six-week timeframe.
“At the time, we contacted affected customers to apologise and sent them their missing payments. We also paid £1.3 million to Ofgem’s Energy Industry Voluntary Redress Scheme Fund in recognition of our failings. We have since taken steps to ensure this error does not happen again.”
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