E.ON must pay £14.5m over billing failures - Ofgem

E.ON has been fined £14.5m by the UK watchdog for "unacceptable" billing failures during the cost of living crisis, it was announced on Wednesday.

Ofgem said that E.ON Next - part of German energy giant E.ON - had failed to provide final bills and refund credit balances to prepayment meter customers between February 2021 and September 2023.

Nearly 250,000 accounts were affected.

Beth Martin, director for consumer protection and competition at Ofgem, said: "Prepayment meter customers are more likely to face financial difficulties, and during a period where households have been facing a significant cost of living crisis, it’s unacceptable that consumers did not receive refunds for credit that was owed to them, or final bills they are entitled to."

An error within E.ON Next's billing system meant customers who transferred to another supplier, or terminated their contract, did not receive final bills within six months, as required under Ofgem rules.

E.ON then failed to pay compensation payments for the delay.

Many customers were also unaware they had credit on their account worth on average £51, and were not provided with refunds automatically.

E.ON has agreed to pay a total of £14.5m in compensation and redress payments, with each customer account receiving on average £144, Ofgem said.

It has also agreed to write off debt held by almost 150,000 prepayment meter customers who closed their accounts during the period under review.

Martin said: "E.ON Next has demonstrated an understanding of the significant impact this issue may have had on its customers, and it’s encouraging that they self-reported the issue and have worked with us to resolve it.

"We are committed to driving up standards in the retail market."

Chris Norbury, chief executive of E.ON UK, said: "We are deeply sorry to the customers affected by this system issue and have taken the correct steps to put things right.

"We have contacted all those affected directly to ensure they receive any outstanding final bills, refunds owed and compensation."