Utility Warehouse to pay £650,000 for price cap overcharging
Utility Warehouse is to refund and compensate 3,430 Warm Home Discount customers with £450,000 after it overcharged them, due to a system error, when the price cap was applied.
The supplier will pay a further £200,000 into Ofgem’s voluntary redress fund, in recognition of the seriousness of the breach and the impact on potentially vulnerable customers.
In December 2019, Utility Warehouse discovered that 3,430 of its customers who receive the Warm Home Discount payment, but pay for their energy when they receive a bill, were paying above the correct default tariff cap level between January and November 2019.
Utility Warehouse quickly self-reported the issue to Ofgem, confirming that an overcharge of £150,000 had occurred. The supplier’s systems were swiftly updated to correct the issue.
Utility Warehouse is in the process of issuing full refunds to all 3,430 customers who were overcharged, in addition to an extra £300,000 of proactive goodwill payments.
An additional £200,000 will be paid into Ofgem’s voluntary redress fund by Utility Warehouse.
Suppliers must be vigilant and ensure that customers, including the vulnerable, are treated fairly. Ofgem’s Enforcement Guidelines strongly encourage companies to promptly self-report potential breaches that may give rise to material harm to consumers, the market or to Ofgem’s ability to regulate.
The total redress package secured by Ofgem reflects the seriousness of the breach, Ofgem’s commitment to protecting the needs of customers who may be likely to be in vulnerable circumstances, and Ofgem’s zero-tolerance approach to compliance with the price cap requirements.
While the overcharging of potentially vulnerable Warm Home Discount customers is a serious matter which must be addressed, Ofgem has decided not to require a larger overall package or to take formal enforcement action on this occasion. This is due to the steps Utility Warehouse has taken to report the matter to Ofgem, correct the situation, and quickly put in place measures to ensure this issue will not re-occur.
Ofgem closely monitors all suppliers’ conduct, including their approach to the implementation of the cap, and will continue to hold suppliers to account if they do not meet their obligations.
Notes to Editors
- About 11 million households are protected by the default tariff cap, which came into effect on 1 January 2019. The cap is temporary, and applies to tariffs for all customers on standard variable and default energy tariffs. Suppliers can price to the level or below the cap, but cannot charge more.
- The default tariff cap is currently £1,179 per annum for the period between 1 October 2019 and 31 March 2020 for households on dual fuel, single-rate based on typical consumption.
- Under the requirements of the default price cap, customers who receive the Warm Home Discount payment should not pay more than the lower Direct Debit level of the cap, regardless of how they pay for their energy.
- 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
- More information on the default tariff cap can be found on our website.
- More information of Ofgem’s Enforcement Guidelines can be found on our website.
For media, contact
Michelle Amos: 020 7901 1881
Media out of hours mobile: 07766 511470 (media calls only)
General enquiries (non-media)
If you are an energy customer looking for help and advice, including complaints about energy firms, please see our Household gas and electricity guide. Citizens Advice also provide a free, impartial helpline service across a range of issues on 03454 040506.
We also regularly share news and post general advice to help consumers get the most out of their energy services via our @Ofgem twitter and Facebook pages. If you have an enquiry or complaint relating to Ofgem’s policies or functions, contact us at firstname.lastname@example.org or on 020 7901 7295.
For all other non-media related enquiries, please visit our Contact us page.
Ofgem is the independent energy regulator for Great Britain. Its priority is to make a positive difference for consumers by promoting competition in the energy markets and regulating networks.
For energy insights and updates straight to your inbox from Ofgem, please subscribe.
Latest News from
Ofgem opens investigation into Symbio Energy Limited over Renewables Obligation and Feed-in Tariff payments06/01/2021 14:15:00
Energy regulator Ofgem has opened an investigation into Symbio Energy Limited over its late payments into the Renewables Obligation (RO) and Feed-in Tariff (FIT) schemes.
Record £348 million in support provided to vulnerable consumers through the Warm Home Discount18/12/2020 16:15:00
Suppliers paid £140 rebate to over 2.2 million vulnerable customers such as low income pensioners last winter
Ofgem confirms approach to boosting green and smart investment in local grids18/12/2020 13:15:00
Ofgem has confirmed its methodology for setting the next price controls for Great Britain’s local electricity distribution networks, known as RIIO-ED2, which run for five years from April 2023.
EDF Energy (Thermal Generation) Limited agrees to pay £6 million for breaching wholesale energy market regulations17/12/2020 13:15:00
From September 2017 to March 2020, EDF Energy (Thermal Generation) Limited (EDF ETG) regularly sent misleading signals to the National Grid Electricity System Operator (ESO) about the capabilities of its generation plant, Ofgem monitoring has found.
Ofgem response to the government’s Energy White Paper15/12/2020 13:15:00
Jonathan Brearley, chief executive of Ofgem, yesterday commented on the publication of the Government’s Energy White Paper.
Ofgem gives go-ahead to a £40 billion+ investment programme for a stronger, greener and fairer GB energy system09/12/2020 13:15:00
Ofgem has finalised its price control for 2021-26 (RIIO-2) by confirming a major investment programme into Britain’s energy infrastructure to improve services for customers, reduce the impact of the networks on the environment, and drive a fair price for consumers.
Ofgem protects customers of failed supplier Yorkshire Energy03/12/2020 10:15:00
Yorkshire Energy Limited (also known as Daisy Energy) a gas and electricity supplier with around 74,000 domestic customers, and a small number of non-domestic customers, is ceasing to trade.
Winners of 2020 Network Innovation Competition help drive net zero01/12/2020 09:15:00
Ofgem has awarded up to £58m to five pioneering projects in the 2020 Network Innovation Competition to help support the transition to a net zero emissions economy at the lowest cost to consumers.