OFGEM have agreed to allow OVO Energy to offer their customers an interest rate bonus. Earlier this year, the supplier argued that they should be allowed an exception to OFGEMs strict retail market rules – in order to offer a 3% bonus to their direct debit customers with an account in credit.
OFGEM aims to increase consumer engagement and stimulate competition in the market, by reducing tariff complexity. However, following a review of OVO Energy’s proposal the regulator has agreed that this deal does not increase the complexity in consumer’s decision making and believe that the deal will be beneficial to consumers.
Jessica Lennard, OVO Energy’s Head of Corporate Affairs said about OFGEMs approval “Regulations should work in the customer’s best interests, but it never felt right to us that the rules allow a supplier to charge interest when an account is in debit, but not reward customers when they are in credit. We set out to make the energy market a fairer, happier place for customers and the interest reward is something they have always told us is really important to them, so we were committed to fighting for it”.
This year OVO Energy believe they have paid out over £1.3 million in interest to nearly 350,000 customer accounts. OFGEM have said that the supplier should be clear in all communication to customers on how the interest bonus is generated and how it will be paid.