Good Energy and Ovo ordered to pay £4m after overcharging customers

Ofgem has ordered Good Energy Group and Ovo Energy to pay a total of £4m after the two suppliers overcharged customers.

The regulator said on Thursday that nearly 18,000 customers were affected, after errors made by both suppliers meant they were charged above the maximum rate allowed under either the energy price cap or the government’s Energy Price Guarantee scheme.

Good Energy overcharged 9,966 customers a total of £391,650 between January 2019 and October 2022, while Ovo Energy overcharged 10,987 customers £1,492,917 above the energy price guarantee from October 2022 and March 2023.

Affected customers will now be automatically refunded as well as receiving compensation. On average, Good Energy will pay affected customers £109 each and Ovo £181 each.

As well as paying refunds and compensation totalling £2.7m, the two suppliers will also pay £1.25m to Ofgem’s voluntary redress fund for vulnerable customers.

Dan Norton, deputy director of retail at Ofgem, said: "We expect suppliers to ensure customers pay no more than the level of the price cap or Energy Price Guarantee, schemes put in place with the very purpose of helping people.

"It is totally unacceptable that Good Energy and Ovo Energy customers were overcharged, particularly at a time that is already so challenging and stressful for consumers across the UK."

A spokesperson for Ovo said: "We’re very sorry to some of our fixed-price customers who experienced a delay in receiving the Energy Price Guarantee discount. We noticed immediately and self-reported the error to Ofgem. The issue has now been fixed."

Good Energy chief executive Nigel Pocklington said: "We are very sorry that we let some of our customers down and promise to put things right.

"The issue, which we reported to Ofgem, originated in 2019. It meant that customers who switched payment method to direct debit were not receiving their discounts for doing so."

This is the second time this week that Good Energy, the London-listed renewables specialist, has been censured by Ofgem. On Thursday, it was one of three firms named by the regulator for either missing or delaying compensation payments.