OFGEM has fined E.ON £7.75m after they incorrectly charged exit fees, and/or overcharged customers following price rises. E.ON was found to have made billing errors in respect of price rises in January 2013 and January 2014. These affected direct debit and standard credit customers. The average amount paid back was around £8 and £12 respectively. E.ON have already paid £400,000 back to customers who were overcharged.
Under Energy Regulator OFGEM rules, suppliers have to give customers 30 days’ notice of a price rise, allowing customers a chance to switch to another supplier before the increase takes effect. If a customer signals their intention to move supplier within the 30 days, they do not incur exit fees or the higher charge even if the switch occurs after the price rise. These arrangements give important protection to those customers who choose to switch in order to avoid a price rise.
Sarah Harrison, senior partner in charge of enforcement said: “OFGEM’s rules give customers a chance to avoid exit fees and higher costs when suppliers put up prices. These are important customer protections and it is vital that suppliers play by the rules so customers are encouraged to engage in the market.
“E.ON’s errors meant customers who took the chance to switch were wrongly charged. It is important that E.ON has repaid potentially affected customers and cooperated with the investigation. However 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.
The £7.75million will go to Citizens Advice to help vulnerable customers.