Ofgem tells E.ON Next to pay up over prepayment meter failings

The energy regulator Ofgem has told provider E.ON Next to pay up £14.5m for failing to provide final bills and refunds to its customers.

E.ON failed to provide customers energy bills or give them back money owed on credit balances for prepayment meters.

This comes after an investigation by Ofgem found that nearly 250k prepayment meter accounts had been affected between early 2021 and late 2023.

The failures were the result of an error within E.ON’s billing system, which E.ON Next self-reported to Ofgem.

In an announcement to markets this morning, E.ON Next, which is part of the E.ON Energy Group, was also found to have more 100,000 customers in credit.

Ofgem said prepayment customers who had moved to another supplier or ended their deal with the company never got their final bills within the mandatory six weeks.

The impact of this was that customers were unaware of the credit remaining in their accounts, worth an average £51, and were not given an automatic refund.

E.ON also failed to hand out compensation payments of between £30 and £ 60 under the underperformance rules known as Supplier Guaranteed Standards of Performance (GSoP).

After the series of failures, Ofgem said that while recognising the financial impact on customers, E.ON Next would pay out £14.5m in compensation and redress.

It said each customer would receive an average of £144, including £4.7m in credit refunds, £6.6m in GSoP, and £3.2m in further compensation.

E.ON has also agreed to make payments to the Energy Industry Voluntary Redress Fund, where it could not trace customers.

Lastly, the company has voluntarily written off debt held by almost 150,000 prepayment meter customers who had closed their accounts.

‘E.ON demonstrated an understanding of the significant impact this had’

Beth Martin, director for consumer protection and competition at Ofgem, said: “Prepayment meter customers are more likely to face financial difficulties, and during a period where households have been facing a significant cost of living crisis, it’s unacceptable that consumers did not receive refunds for credit that was owed to them, or final bills they are entitled to.” 

“E.ON Next has demonstrated an understanding of the significant impact this issue may have had on its customers, and it’s encouraging that they self-reported the issue and have worked with us to resolve it, and compensate affected customers to put things right. The action to write off debt will also offer affected households’ peace of mind.”

“We are committed to driving up standards in the retail market so each and every customer gets the service they deserve from their energy company. If we see companies failing to act in the interest of their customers, we can and will take action.”  

Chris Norbury, chief executive of E.ON UK said:  “We are deeply sorry to the customers affected by this system issue and have taken the correct steps to put things right.  

“As soon as we became aware of the error, we acted swiftly to report it to Ofgem and have since made significant changes to prevent it from happening again. We are committed to putting things right for our customers.”

He added that the firm has “contacted all those affected directly to ensure they receive any outstanding final bills, refunds owed and compensation. This includes ensuring that those who were in credit receive the money they are entitled to and those who were in debit when they left having that money owed removed entirely.”