E.ON fined for overcharging customers
Thousands in line for refunds after regulator steps in.
Around 40,000 people are to be given refunds after energy company E.ON was found to have overcharged its customers.
An investigation by energy regulator Ofgem revealed that the energy giant had incorrectly charged exit fees and/or charged customers more than it should have following price rises in January 2013 and January 2014.
According to Ofgem rules, customers must be given 30 days’ notice of a price rise, meaning they can switch to a new deal before the increase takes effect. During this period, they can switch without exit fees. However, E.ON charged fees to customers who attempted to leave following their price rises.
While 40,000 customers will be receiving refunds, the regulator suggests the number of people actually affected by the mistake is likely to be significantly less.
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Persistent failure
Around £400,000 is being handed back to customers, while a further £7.75 million is to be paid to Citizens Advice to go towards helping vulnerable people. Ofgem said the size of the fine was significant as E.ON has made the same error previously – back in 2012 it paid out a total of £1.7 million for overcharging customers following price rises.
Sarah Harrison, senior partner in charge of enforcement at Ofgem, said that E.ON’s errors meant people who took advantage of their rightful opportunity to switch were wrongly charged. She added: “It’s absolutely unacceptable that E.ON failed to provide these vital customer protections yet again and this persistent failure is the reason for the high penalty."
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