Ovo and Good Energy customers to get refund after 'totally unacceptable' errors

About 18,000 households were wrongly charged more than the government's energy price guarantee which has capped gas and electricity bills at £2,500 between last October and June this year.

The two providers have been ordered to pay a total of £4 million, with £2.7m going straight back to consumers.

The average payment for Ovo customers will be £181, after it overcharged almost 11,000 households by nearly £1.5m between last October and March.

Good Energy overcharged nearly 7,000 customers by nearly £400,000 between January 2019 and October 2022 and will refund victims £109 on average.

The energy providers have been told to give compensation as well as refunds.

Good Energy has also been forced to pay £1.25m into Ofgem's redress fund which helps vulnerable customers across the country, due to "inadequate systems, processes and repeated inaccurate reporting of information”.

Ovo's £10,000 payment into the fund would have been higher had it not acted quicker to resolve the problem.

Dan Norton, deputy director of retail at Ofgem said: "It is totally unacceptable that Good Energy and Ovo Energy customers were overcharged, particularly at a time that is already so challenging and stressful for consumers across the UK."

Those affected will be automatically refunded.

A spokesperson for Ovo said: "We're very sorry to some of our fixed-price customers who experienced a delay in receiving the Energy Price Guarantee discount. We noticed immediately and self-reported the error to Ofgem.

"The issue has now been fixed and compensation has been paid as an apology."

Nigel Pocklington, Good Energy's chief executive, said: "We are very sorry that we let some of our customers down and promise to put things right.

"We have been contacting those impacted to apologise and issue their refunds and goodwill payments and will be fixing the issue so it does not happen again."

Octopus, E.On Next and Good Energy sanctioned

Good Energy was also told to pay compensation to customers after delays to sending final bills to households after they switched supplier.

Along with E.On Next and Octopus, the three suppliers had to pay a total of £8 million to 100,000 customers, Ofgem announced last week.

The providers had missed previous deadlines to pay the compensation, due because they had not sent final bills within the mandatory six weeks.

Customers are entitled to £30 compensation if their final bill is not produced within six weeks, and another £30 if this is not paid within 10 working days.

Some households had to wait more than a year to receive their payments, Ofgem said.

Good Energy only had to pay £18,000 in compensation to 350 customers, but E.On Next was ordered to pay £5.5 million to nearly 95,000 people. Octopus had to pay £750,000 to 19,000 billpayers.

Another £1.7m was paid by the companies to Ofgem's voluntary redress scheme for vulnerable households. E.On Next paid £1.3m into the fund.

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."

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