E.On Next, Good Energy and Octopus Energy have paid £8m over compensation failures after lengthy delays in producing final bills to more than 100,000 customers when they switched suppliers, regulator Ofgem said.
The energy watchdog said the three suppliers either missed or delayed compensation payouts that were due when they did not provide a final bill within six weeks, as required when a customer switches to another provider.
Under rules brought in three years ago, customers are entitled to a £30 payment each if a final bill is not produced in six weeks, with a further £30 due if the compensation is not provided within another 10 working days.
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Ofgem said the firms either missed or delayed compensation payments worth £6.3m, with some of the affected households waiting over a year to receive redress.
E.On Next paid the bulk of the fine, forking out £5.5m to almost 95,000 customers, while Octopus paid around £750,000 to 19,000 customers and almost 350 Good Energy customers received a combined total of £18,000.
The suppliers also paid an extra £1.7m to customers or the energy industry voluntary redress scheme (EIVRS), which supports vulnerable consumers, of which E.On Next paid £1.3m.
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.
“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.”
The rules introduced in May 2020 ensure that suppliers compensate households when switches are delayed, for errors in switching or if final bills are produced too late.
“Not getting a final bill in a timely manner can result in a consumer being incorrectly set up at the new supplier, being in debt at the old supplier and receiving a large, unexpected bill,” Ofgem said.
Ofgem added that the switching standards will be increasingly important this year, as falling energy bills are expected to drive switching once again as customers shop around for the best deals.
It said the three suppliers have since updated their processes and systems to ensure final bills are produced within six weeks.
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