Ovo Energy to pay £8.9m in settlement for overcharging and billing issues

More than 8,000 customers were billed wrongly by the energy company due to IT failures. Photo: Getty

Ovo, the UK's biggest independent energy supplier, has been forced pay almost £8.9m ($11.6m) to the industry regulator after it overcharged customers.

An investigation by the Office of Gas and Electricity Markets (OFGEM) found that Ovo had sent inaccurate statements to more than half a million customers. Some customers did not receive an annual statement at all.

It also failed to give 10,000 customers statements of renewal terms when tariffs were ending, or were not moved onto new tarrifs when their existing one ended. More than 8,000 customers ended up paying above the level of the prepayment meter cap as a result.

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A further 17,000 prepayment meter customers were not initially charged at the correct regional level of the prepayment meter cap.

Ovo also underestimated consumption over winter in 2017, meaning customers were under or overcharged. One customer was overcharged £4,500, OFGEM said in it's report.

While the company refunded some customers, it refused to do so for those who were overcharged less than £10, saying it did not believe it was “an efficient use of resources.”

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The errors were a result of Ovo's IT systems failings and compliance processes over five years.

Ovo did not report these issues to OFGEM despite being aware of them, the watchdog said.

Anthony Pygram, director of conduct and enforcement at OFGEM, said: “Ovo Energy billed a number of its customers incorrectly and issued them with inaccurate information.

"The supplier did not prioritise putting these issues right whilst its business was expanding.

"Our enforcement action sends a strong message that suppliers must get basic services right for all their customers. Ovo Energy has accepted the breaches and put processes in place to comply with the rules in future.”

The firm has agreed to pay a £8.9m settlement to avoid a fine. It will also reach out to vulnerable customers.

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In a statement, the company said: “Ovo Energy holds itself to high standards, but we have not always got it right.”

It has since put in place measures to make sure the mistake doesn’t happen again. These include “investments in technology and implementing appropriate compliance procedures”, according to OFGEM.