Big six supplier E.ON has been fined £7.75 million after the energy industry watchdog Ofgem found that the company had been overcharging customers following price rises in 2013/2014, and incorrectly charging termination fees for customers who wished to switch suppliers.
According to rules imposed by Ofgem, customers are allowed to switch from fixed price tariffs without being charged an early exit fee, providing they switch within 30 days of being notified of price increases. It has been found that E.ON have been acting in breach of these rules, and continued to charge customers who had decided to switch within the 30 days following a price increase announcement.
The energy giant previously identified the problem and has made efforts to pay back £400,000 to its credit and Direct Debit customers, however Ofgem has identified a further 7,000 prepayment customers who have also been affected.
The energy supplier has until the end of April to repay all outstanding money, a task which looks increasingly unlikely.
E.ON has apologised to all of the customers affected by this repeat error, stating: “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.”
Despite the apology consumer champions are outraged and claim the figure that customers have been short changed by shouldn’t over shadow the fact that the error has occured for a second time.
When deciding on the size of the fine, Ofgem claimed that they took into account the fact that the supplier wouldn't be in a position to repay all the money before the end of April and the fact that this isn’t the first time E.ON has been caught out in this way.
Ofgem Senior Partner Sarah Harrison said “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.”
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