energy

UK energy supplier Ovo to pay £8.9m in fines

[ad_1]

Ovo is to pay £8.9m in fines after being reprimanded by the energy regulator for issuing customers with “inaccurate” or “incomplete” information over five years.

Ofgem on Wednesday listed a series of failings by Britain’s second-largest energy supplier, which has caught attention over the past decade by attacking the business models of the former “Big Six” energy suppliers, which included British Gas, EDF Energy, Eon, Npower, ScottishPower and SSE.

Ofgem said the Bristol-based private company had sent inaccurate annual statements to more than half a million customers between July 2015 and February 2018, or not sent an annual statement at all to some customers. 

Other problems included underestimating customers’ energy consumption one winter, leading to households being over or undercharged.

Ovo was also criticised for incorrectly charging some customers who used pre-payment meters to settle their bills after prices were capped for such consumers, which often include poorer households, in 2017.

Overall the problems, which were put down to failings in Ovo’s IT systems and compliance processes, occurred over five years, said Ofgem.

The fines will leave Ovo red faced just a fortnight after it completed a game-changing £500m deal for the British domestic arm of SSE, which in one swoop turned it into one of the biggest energy suppliers in the country, second only to British Gas. SSE exited the market via the deal while another Big Six supplier Npower has been folded into Eon.

Stephen Fitzpatrick, a former City trader, has sent sparks flying in the energy industry since founding Ovo in 2009 by lambasting the pricing models of his bigger rivals, particularly during an eventful hearing to MPs in 2013.

Ofgem also highlighted Ovo did not report the majority of issues itself “despite being aware of them and was slow to put things right”.

Anthony Pygram, director of conduct and enforcement at Ofgem, said: “The supplier did not prioritise putting these issues right whilst its business was expanding.”

Ofgem added that Ovo had accepted the breaches and had taken corrective action, including writing off all amounts that were owed by customers who had been charged incorrect rates.

Ovo, which last year sold a 20 per cent stake to Japan’s Mitsubishi Corporation, said it “holds itself to high standards” but admitted “we have not always got it right”.

“We accept Ofgem’s findings of issues regarding estimation processes, information formatting and pricing errors,” it said.

British regulators and politicians have been keen to encourage new entrants to the energy market but it hasn’t always been plain sailing. A litany of smaller suppliers have gone bust in the past few years.

Ofgem said on Wednesday that another energy “challenger”, Utility Warehouse, would refund and compensate more than 3,400 potentially vulnerable customers who were overcharged when a wide-ranging energy price cap was introduced last year.

[ad_2]

READ SOURCE

This website uses cookies. By continuing to use this site, you accept our use of cookies.  Learn more