Ovo, the UK’s largest independent energy supplier has been caught incorrectly charging customers, and is being made to shell out £8.9 million.
What did Ovo do wrong?
Between 2015 and 2018, over half a million customers were sent inaccurate statements relating to their energy bills, while hundreds of thousands of others weren’t sent one at all. Then in the winter of 2017, Ovo charged a lot of customers incorrectly after underestimating fuel usage for the cold season, either over or undercharging them. Some people were overcharged by a few pounds, but one customer was overcharged by over £4,500. Around 10,000 additional customers were not made away of their tariffs ending and the need to renew their contracts, and were therefore moved to default tariffs with higher prices. Even customers on prepayment meters had problems, with thousands being charged more than Ovo was allowed to.
Ovo Energy is only about 10 years old as a company, but has grown incredibly fast in that time, now employing 8,000 staff and providing energy for millions of people across the country.
What happens now?
Ofgem has been investigating Ovo for a while – around 5 years – and now they’ve called the company over the large number of complaints that they’ve had. The head of enforcement at Ofgem has said “Ovo Energy billed a number of its customers incorrectly and issued them with inaccurate information. The supplier did not prioritise putting these issues right whilst its business was expanding.”
Ovo themselves have made a public apology, admitting that they made errors. They’ve refunded a lot of people, and written off debts incurred by them undercharging people. They’ve also agreed to pay £8.9 million in a voluntary redress fund aimed at helping out their most vulnerable customers.
Can I get a write off?
Ovo underestimated a large number of energy bills in the winter of 2017. This meant people were paying less than they should have, and subsequently found themselves in debt to Ovo. As you can imagine, people aren’t happy about this, since from their perspective they paid their bills exactly as their energy supplier instructed.
To begin with, Ovo was not exactly being helpful about the situation. They refused to refund overcharged amounts under £10, something that Ofgem pulled them up on. Ovo said that they “did not believe it was an efficient use of resources to process 120,000 small value refunds.” Granted, a few pounds may not be much, but customers were unhappy that Ovo felt they were at liberty not to provide refunds that they legally should have.
Since Ofgem have gotten involved, Ovo have now written off a number of underpayments of less than £100.
Is Ovo trustworthy?
It’s difficult to say. They’ve proved exceptionally popular, rising in such a short space of time to become the second largest energy supplier in the UK, and a lot of people are getting perfectly good service from them.
That said, it’s clear from all the errors that have been made public that there is a pattern of misleading their customers, whether intentional or not. Their hesitation to refund people after these errors is also a cause for concern. The nearly £9m fund to help the vulnerable is a step in the right direction, but it seems very unlikely that Ovo would have done it had Ofgem not been involved.
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