Energy supplier Utilita is to pay £500,000 in compensation after it overcharged almost 40,000 customers.
Industry watchdog Ofgem said prepayment customers were overcharged by a total of more than £125,000.
It said the customers have now been refunded by Utilita and will also receive at least £10 in a goodwill payment as part of the compensation package.
A £140 payment will also be made to around 900 Utilita customers who applied to the supplier for the Government’s Warm Home Discount scheme but were unsuccessful.
An additional £45,000 will also be paid into Ofgem’s Voluntary Redress Fund as part of the £500,000 payout.
The regulator said its investigations found around 6,600 prepayment customers were overcharged by a total of £22,700 over the prepayment price cap.
Meanwhile, around 33,000 customers were overcharged by a total of £105,000 over what they should have paid under their advertised energy tariff.
Utilita reported itself to the regulator for mistakenly overcharging customers between May and September 2019.
Cathryn Scott, director of enforcement and emerging issues at Ofgem, said: “Ofgem closely monitors suppliers’ compliance with the price cap, which ensures consumers pay a fair price for their energy.
“This case sends a message to all suppliers that Ofgem will intervene if they charge customers above the level of the cap or above advertised tariffs.
“It also shows that, where appropriate, Ofgem is prepared to work with suppliers who have failed to comply with their obligations but who have self-reported and are willing to put things right quickly.”
Utilita agrees to pay £500,000 for overcharging its customers
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— ofgem (@ofgem) October 29, 2020
Utilita chief executive Bill Bullen said: “I would like to apologise unreservedly to all customers who were temporarily out of pocket.
“I am sorry that we did not issue prompt refunds during the period in question.
“We know we can always improve and will always take on board criticism of any legitimate failings.
“Ofgem made it clear that the overcollection was caused by our failure to carry out an administrative process that corrected the temporary overcollection.
“I can reassure customers that the issue was not with the tariff itself, which was confirmed to be in accordance with the cap.”