OVO Energy ordered to pay £271 into customer accounts after mistake | Personal Finance | Finance
OVO Energy has been ordered to pay a total of £2.37million in compensation and redress payments after the regulator Ofgem identified “a number of failings” in the way the company has handled customer complaints.
Ofgem’s investigation found that 1,395 OVO customers experienced severe delays, sometimes lasting up to 18 months, in addressing their complaints. Additionally, there were delays in implementing decisions from the Energy Ombudsman.
As a result, OVO said it will pay £378,512 directly to affected customers. This amount could translate to £271 for each affected customer as compensation for the distress and inconvenience caused.
In addition to direct payments, OVO has also contributed £2million to the Energy Industry Voluntary Redress Scheme in recognition of the severity of consumer detriment caused.
According to OVO, affected customers will be contacted directly and do not need to take any action.
OVO has upgraded its complaint-handling system, boosted its resources, and improved oversight by senior staff to prevent future problems.
Jacqui Gehrmann, deputy director of retail compliance at Ofgem, commented: “Energy is an essential service. When things go wrong, it can cause consumers a lot of distress. In this case, OVO failed to adequately protect and respond to their customers when it was needed most. This is not acceptable.
“Consumers deserve a clear and timely response when they make a complaint, and that’s why we stepped in quickly when we identified that OVO’s performance was falling below acceptable standards.
Ofgem said it first engaged with OVO in June 2023 after concerns were raised about delays in addressing complaints referred by Citizens Advice Scotland’s Extra Help Unit and in implementing decisions from the Energy Ombudsman. The regulator found key areas for improvement and required OVO to submit a plan to resolve these issues.
Natasha Gilmour, head of operational support at Citizens Advice Scotland, commented: “The Extra Help Unit is a Great Britain-wide service managed by Citizens Advice Scotland to help vulnerable consumers experiencing difficulties with their energy suppliers.
“While it’s rare for a compliance case to be necessary to resolve such issues, it is reassuring to see how OVO has responded to the investigation by Ofgem, and we are satisfied that the new practices implemented are ensuring good and timely outcomes for our clients.”
The Energy Ombudsman also welcomed the news, stating: “Following compliance engagement between Ofgem and OVO, consumers will be compensated for OVO’s failures to implement the remedies set by the Energy Ombudsman.
“Our role is to resolve disputes between consumers and energy suppliers, providing independent and impartial decisions that ensure fair outcomes. These decisions are legally binding, and suppliers are required to implement them within 28 days. While the majority of resolutions are carried out on time, there are instances where consumers face unacceptable delays.
“It is reassuring to see that this investigation is now concluded and that OVO has reviewed and improved its systems and procedures.”
Since 2020, Ofgem has collected over £400million through compliance and enforcement activities to assist households struggling with bills. In 2023 alone, Ofgem recovered £77.2million in fines, customer refunds, and compensation, marking a significant increase from the previous year.
