Energy giant and ‘big six’ member fined for incorrect exit fees and charging too much for second time in two years

This article is more than 5 years old

This article is more than 5 years old

Energy giant E.ON has been fined nearly £8m for incorrectly charging customers – the second time in two years.

Energy regulator Ofgem imposed the £7.75m penalty after it discovered E.ON was incorrectly charging exit fees and overcharging customers following price rises in 2013 and 2014.

Under the regulator’s rules, suppliers have to give customers 30 days’ notice of a price rise to allow people a chance to switch to another supplier if they want to. If a customer tells their supplier they are going to move within that time, they should not be charged an exit fee or the higher energy price even if the switch takes place after the price rise. E.ON failed to follow these rules.

It has already paid back £400,000 to customers who may have been affected. Those were direct debit and standard credit customers who signalled their intention to switch within the 30 day period before price rises kicked in in January 2013 and January 2014.

However, E.ON later discovered that 7,000 customers on prepayment meters were also affected and is now tracking them down to refund them by the end of April.

Ofgem described the delay as serious and said it took this into account when deciding the fine. The money will go to Citizens Advice to help vulnerable consumers.

The penalty also takes into account that E.ON made the same billing error in 2012, when it was forced to pay back 100,000 former customers an average of £15 each.

This time the average repayment is about £8 for direct debit customers and £12 for standard credit customers. The average refund for those on pre-payment meters is £3.42.

“E.ON’s errors meant customers who took the chance to switch were wrongly charged,” said Sarah Harrison, senior partner in charge of enforcement at Ofgem. “It is important that E.ON has repaid potentially affected customers and cooperated with the investigation.

“However, 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.”

E.On apologised to those affected.

In a statement it said: “Following reports from E.ON, Ofgem opened an investigation into the errors in June 2014 and has agreed today’s penalty package in recognition of the company’s errors. These errors meant that some customers were overcharged, although in the majority of cases this was by less than £10.”

Thursday’s fine will add to the growing tide of customer resentment against badly behaving energy companies.

Last month, Scottish Power was forced to suspend all sales calls to customers for 12 days after it failed to clear a backlog of complaints and the previous month Spark Energy was ordered to pay £250,000 to Citizen’s Advice for failing to treat customers properly. At the end of last year, British Gas, SSE and Scottish Power were all fined for failing to deliver energy-efficiency measures on time.

Earlier this year, a Guardian/ICM survey found that the UK energy giants are even more disliked than banks.



People were asked to pick which two or three villains from a rogue’s gallery of businesses that they most disliked, and 46% picked gas and electricity suppliers – more than any other sector.