250,000 customers get £144 refund from major energy firm

E.ON Next has paid £14.5million after it failed to provide final bills and refund credit balances to prepayment meter customers.

The energy firm also subsequently didn't make compensation payments when it should have. The issue affected almost 250,000 prepayment customers between February 2021 and September 2023, with each customer receiving £144 back on average from the energy firm.

Ofgem requires energy firms to provide a final bill to customers within six weeks when they tell their supplier they want to leave. But an investigation by the energy regulator found E.ON Next failed to do this for thousands of customers.

Because they did not receive a final bill, these customers were also unaware of the credit remaining on their accounts, worth £51 on average, and were not issued refunds automatically. The Ofgem investigation found 100,000 of the affected accounts were in credit.

E.ON Next also subsequently failed to make compensation payments of £30 or £60 as required under Ofgem rules, for the delay in providing final bills. E.ON Next self-reported itself to Ofgem after it become aware of an error within its billing system and agreed to pay £14.5million in compensation and redress payments

This includes £4.7million in credit refunds and £9.8million in compensation. E.ON Next has also agreed to voluntarily write off debt held by almost 150,000 prepayment meter customers who closed their accounts with the supplier between February 2021 and September 2023.

All affected accounts who were able to be identified have been contacted by E.ON Next. Where it has not been possible to contact a customer, E.ON Next has agreed to make additional payments to the Energy Industry Voluntary Redress Fund.

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.

“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, and compensate affected customers to put things right. The action to write off debt will also offer affected households peace of mind.

“We are committed to driving up standards in the retail market so each and every customer gets the service they deserve from their energy company. If we see companies failing to act in the interest of their customers, we can and will take action.”

Chris Norbury, Chief Executive Officer 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. As soon as we became aware of the error, we acted swiftly to report it to Ofgem and have since made significant changes to prevent it from happening again. We are committed to putting things right for our customers.

“We have contacted all those affected directly to ensure they receive any outstanding final bills, refunds owed and compensation. This includes ensuring that those who were in credit receive the money they are entitled to and those who were in debit when they left having that money owed removed entirely.”

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