E.ON to pay over £650,000 after taking Direct Debit payments early
Energy regulator Ofgem has closed compliance engagement with E.ON relating to Direct Debit payments being taken earlier than agreed from 1.6 million customers.
- E.ON took Direct Debit payments earlier than agreed from 1.6 million customers.
- E.ON has agreed to make goodwill payments to compensate customers affected by additional bank charges and pay an additional £627,312 to the energy redress fund
- E.ON customers should seek compensation if they feel they have been negatively affected and have not been in contact with E.ON already
A majority of the affected payments were due to be taken in January 2021, but E.ON erroneously took payments on 24 December 2020. This meant customers may have experienced out of pocket expenses; unexpected overdraft bank charges; difficulty making payments in the run up to Christmas; and other unforeseen circumstances.
The affected payments were taken due to a technical fault, following changes E.ON made to friendly credit hours for pre-payment (PPM) customers between Christmas and New Year.
Ofgem considers that E.ON failed to conduct the appropriate checks to ensure that this would not lead to any unintended consequences for customers.
E.ON self-reported the issue to Ofgem on 24 December and continued to engage throughout January and February 2021. E.ON made redress and goodwill payments totalling £55,039 to customers who contacted the supplier to say they had suffered additional bank charges, out of pocket expenses or other detriment, as a result of the Direct Debits being taken early.
E.ON has committed to continue to make redress and goodwill payments for bank charges, out of pocket expenses and other detriments to customers who make legitimate claims in respect of this issue.
E.ON will pay £627,312 in recognition of its failure to address underlying system and governance weaknesses, which would have prevented the error from occurring, to the energy redress fund.
Ofgem agreed to close engagement following commitments from E.ON to address the causes of the issue and compensate any customers that suffered detriment.
Anna Rossington, director of retail at Ofgem, said:
“Ofgem expects suppliers to adhere to the terms of contracts they have with customers, in particular the agreed Direct Debit payment dates. This failure is a reminder to suppliers that when making changes to their systems, they need to undertake appropriate checks to avoid any unintended consequences for customers.
“Ofgem is always prepared to work with suppliers who have failed to comply with their obligations, but who have self-reported and are determined to put things right, as E.ON has done.”
Customers who have been negatively affected and haven’t already spoken to E.ON about it, should contact E.ON if they wish to make a claim for any bank charges or other detriment caused by the early direct debit payments.
Notes to Editors
- Standard Licence Condition (“SLC”) 22.3 requires that licensed suppliers supply Electricity and Gas in accordance with the Domestic Supply Contract.
- In accordance with Standard Licence Condition (“SLC”) 0.3(c), Ofgem expects suppliers to act promptly to put things right when they make a mistake. E.ON’s identification of a further 110,060 customers impacted by this issue on 31 December suggests that it did not do this.
The Voluntary Redress Fund provides money to charities to deliver energy related projects that support energy consumers in vulnerable situations. It also helps to deliver benefits to consumers, who were negatively impacted by the specific issue that triggered the redress payment. For more information about Ofgem’s Voluntary Redress Fund, see: Ofgem appoints Energy Saving Trust to distribute payments from rule-breaking energy companies to charities.
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