Three energy firms ordered to pay £8million compensation – what you need to know

17 May 2023 , 08:00

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Energy customers have been paid compensation (Image: Getty Images)

Three energy suppliers have paid out £8million to more than 100,000 customers after failing to make compensation payments.

Energy watchdog Ofgem said E.On Next, Good Energy and Octopus Energy either missed or delayed payouts that were due.

It comes after the firms failed to provide a final bill to customers within six weeks, after they had switched to another provider.

Under rules brought in during 2020, customers are entitled to a £30 payment each if a final bill is not produced in six weeks.

A further £30 payment is then due if the compensation is not provided within another 10 working days.

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This is the first time the rules have been used since being brought in three years ago.

The rules are also designed to compensate households when switches are delayed, or for errors made when switching.

Ofgem said the firms either missed or delayed compensation payments worth £6.3million, with some of the affected households waiting over a year to receive redress.

E.On Next paid out £5.5million to almost 95,000 customers, while Octopus paid £750,000 to around 19,000 customers and almost 350 Good Energy customers received £18,000.

The suppliers also paid a combined £1.7million to customers or the energy industry voluntary redress scheme (EIVRS), which supports vulnerable consumers.

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."

Ofgem said the three suppliers have since updated their processes and systems to ensure final bills are produced within six weeks.

What you need to know

All affected customers should have received their compensation by now, which should work out around £60 per household.

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Customers who may have been affected include those who switched away from one of these firms in 2020 or 2021, and their final bill was sent after the six-week deadline.

If you don’t think you’ve received compensation, and believe you are eligible, you should contact the firm you were with to double check.

Here is a breakdown of the suppliers and how much compensation they paid out:

• E.on Next – paid £5.5million to almost 95,000 customers

• Octopus Energy – paid £750,000 to about 19,000 customers

• Good Energy – paid £18,000 to almost 350 customers

Levi Winchester