Ovo Energy will pay a penalty of over £2.7m after failing to pass on government support payments for winter energy bills to thousands of vulnerable customers during the energy cost crisis.
The regulator found that Ovo, set up by Tory donor Stephen Fitzpatrick, was almost two years late in passing on the warm home discount (WHD) payments to almost 12,000 customers by the deadline on March 2024.
The 19-month delay meant that some of the UK’s most vulnerable households were left without the financial support they were entitled to during the coldest winter months, at a time when the average energy bill was almost £2,000 a year.
Those affected included over 7,700 customers who were on the priority services register, meaning they are classed as vulnerable energy consumers, of which 4,000 were medically vulnerable.
The customer support failure is the latest blow to Ovo, which has seen a succession of executives struggle to raise fresh funds from investors to help the troubled company meet the regulator’s tougher financial standards.
The government’s WHD scheme gives households on low incomes £150 off their electricity bill, and is applied by the energy companies rather than sent out to customers directly.
To qualify for the payment, customers need to receive at least one benefit, such as housing benefit or jobseeker’s allowance.
Ovo fell “significantly short” of its obligations, according to Neil Lawrence, a director at Ofgem, though the regulator acknowledged that the company has taken “positive steps” since the breach. Ofgem said the missed deadline was due to an internal error and the company had since changed its systems.
“We expect all suppliers to have robust processes in place and to act quickly when issues arise. Failures of this kind are unacceptable, and we will continue to intervene where necessary to ensure customers receive the support they are entitled to,” Lawrence said.
“The warm home discount is a vital source of support for vulnerable energy consumers. Delays of this magnitude can cause real harm, particularly for those experiencing fuel poverty who also have medical needs. Suppliers must act swiftly and accurately to deliver these payments on time – where this does not happen, we will intervene and are prepared to take strong action,” he added.
OVO will pay a total of £2,765,200 in compensation directly to affected customers. This will include £150 for all impacted customers, and an additional £150 for medically vulnerable customers. It will pay a further £100 for each instance in which a customer was unable to top up their energy meter between 31 March and 31 May 2024 as a result of the delayed WHD payment.
A spokesperson for Ovo said: “We’re very sorry that some customers did not receive their warm home discount payments on time. We have worked closely with Ofgem to understand what went wrong and to put measures in place to ensure it does not happen again. We did not meet the high standards of service we set for ourselves, and all affected customers have now been compensated.”
