18 energy suppliers pay £10.4 million for contract renewal failures

Publication date
2nd March 2021
Information types
Policy areas
  • Ofgem found 18 suppliers failed to correctly protect customers’ tariff prices when they decided to switch supplier or tariff 
  • Over 1 million customers were overcharged over £7.2 million for the failings  
  • Collectively, the suppliers are issuing refunds and redress payments worth £10.4 million 

Energy regulator Ofgem found 18 suppliers did not adhere to price protection rules, which protect a customer’s tariff price when they decide to either switch suppliers or tariffs after a price increase.

Several of the suppliers self-reported the issue to Ofgem. All suppliers were then requested to self-assess their practices, which revealed that 18 suppliers were not compliant between 2013-2020.

In total, over 1 million customers were overcharged over £7.2 million.

The customers affected included: 

  • those on a standard variable tariff who switched to another supplier but did not have their variable tariff price protected during the switch,
  • customers on a fixed-term tariff who switched to another supplier but did not have their fixed term tariff protected during the switch, and 
  • customers on a fixed-term tariff who moved to another tariff with their supplier but did not have their fixed-term tariff protected during the switch.

Most of the failures were down to suppliers not having adequate arrangements in place to make sure the protections were applied in full when customers decided to switch.

The suppliers have since agreed to refund all affected customers, and in some cases make goodwill payments, to the tune of £10.4 million. Where it has not been possible to process refunds, the suppliers have agreed to make payments to the energy redress fund.

Ofgem made clear to suppliers that customers’ tariffs are protected while either switching suppliers or tariffs and they need to ensure their systems, processes and practices are fit for purpose.

Ofgem expects all suppliers to ensure that they comply with these requirements and if further non-compliance is identified, Ofgem will be likely to take formal action.

Anna Rossington, interim director of retail at Ofgem said:

“Customers should have confidence in switching and not be overcharged when doing so. This case sends a strong message to all suppliers that Ofgem will intervene where customers are overcharged and ensure that no supplier benefits from non-compliance. 

“It also shows that, where appropriate, Ofgem is prepared to work with suppliers who have failed to comply with the rules, but who are willing to self-report issues and put things right for their customers.”

The suppliers, number of customers affected, and redress payments are as follows:

Supplier

Number of customers affected

 Total Detriment (£) 

 Total Redress Package

Bristol Energy

12,617

£55,982.64

£56,552.64

British Gas/ Centrica

141,415

 £391,176.79

 £1,269,095.47

E (Gas and Electricity)

20,870

 £68,777.23

 £ 72,772.93

E.On

28,126

 £181,668.29

 £238,884.29

EDF

73,129

 £465,441.36

 £ 516,191.55

Engie

9,061

 £12,803.98

 £21,218.74

ESB Energy

1,961

 £35,102.00

 £49,787.00

Green Star Energy

79,083

 £664,661.00

 £808,351.00

npower

2,030

 £24,207.69

£25,602.69 

Octopus Energy

19,712

 £59,902.15

 £121,444.52

Orbit

723

 £5,539.25

 £7,081.12

OVO Energy

240,563

 £2,001,196.45

 £2,801,231.51

PFP Energy

5,347

 £35,204.31

 £50,929.31

Scottish Power

157,236

 £1,449,835.28

 £1,967,465.28

Shell

225,823

 £1,001,203.40

 £1,217,203.40

So Energy

10,514

 £59,723.56

 £ 78,480.89

SSE

132,620

 £713,973.86

 £983,334.45

Utility Warehouse

2,723

 £62,783.92

 £95,512.15

Ofgem has now closed this compliance engagement without taking formal enforcement action, taking into account the suppliers’ cooperation with Ofgem, and the steps they have taken to address their failings.

Notes to editors

  • Ofgem has published a compliance note with further details.
  • The Ovo Group acquired SSE Retail in January 2020.    
  • Shell acquired Green Star Energy in November 2019.
  • This compliance action relates to Standard Licence Conditions 23.6, 24.9 and 24.11.
  • The Energy Industry Voluntary Redress Scheme 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 the Energy Industry Voluntary Redress Scheme, see: Ofgem appoints Energy Saving Trust to distribute payments from rule-breaking energy companies to charities.

For media, contact 

Michelle Amos: 020 7901 1881 

Media out of hours mobile: 0792 882 9894 (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 0808 223 1133. 

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 consumeraffairs@ofgem.gov.uk or on 020 7901 7295. 

For all other non-media related enquiries, please visit our Contact us page

About Ofgem 

Ofgem is Britain’s independent energy regulator. Our role is to protect consumers now and in the future by working to deliver a greener, fairer energy system. We do this by: 

  • Working with Government, industry and consumer groups to deliver a net zero economy at the lowest cost to consumers. 
  • Stamping out sharp and bad practice, ensuring fair treatment for all consumers, especially the vulnerable. 
  • Enabling competition and innovation, which drives down prices and results in new products and services for consumers. 

For facts, figures and information about Ofgem’s work, see Energy facts and figures or visit the Ofgem Data Portal

For energy insights and updates straight to your inbox from Ofgem, please subscribe

Follow us on Twitter @ofgemLinkedIn and Facebook.