E.On Next Energy Ltd: Alternative Action
Decision
Publication date
Company
Industry sector
Supply and Retail Market
Licence type
- Electricity Supply Licence
- Gas Supplier Licence
Related links
Decision to close the investigation into E.On Next Energy Ltd (“E.On”) and its compliance with Standard Licence Conditions (“SLC”) 0.3(c)(i) and 0.3(c)(iii) (“the relevant SLCs”) of its gas and electricity supply licences – which relates to suppliers’ obligation to provide adequate customer service.
Provisional Order and investigation
On 2 February 2023, the Gas and Electricity Markets Authority (“the Authority”) issued E.On with a Provisional Order as it appeared that E.ON was contravening, or was likely to contravene, the relevant SLCs.
This action was taken following Ofgem’s Market Compliance Review (“MCR”) assessing the quality of all energy suppliers’ customer service over the period of October – December 2022. This review found that there were significant failings in E.ON’s customer service performance during that period, which notably resulted in excessive call waiting times for its customers and high call abandonment rates.
The Provisional Order (“PO”) required E.On to:
- Implement changes in its policies and procedures;
- Provide data regarding its customer service provision; and
- Engage with the Authority to ensure all necessary steps were being taken to ensure compliance with the relevant SLCs and understand the causes of the alleged breach.
The Authority has engaged with E.ON throughout the period of the PO being in place. Having assessed the information received, the Authority is satisfied that E.ON has been taking steps which we consider to be appropriate to secure compliance with relevant SLCs. As such, the PO was not confirmed and is no longer in place.
Alternative Action
In accordance with our Enforcement Guidelines, the decision was taken to resolve this matter by way of Alternative Action, rather than seek to impose a financial penalty.
In recognition of its failings, E.On has agreed with Ofgem a redress package totalling £5 million. The package comprises of:
- £8 payments to 500,000 customers who were potentially impacted by the poor customer service provision during the relevant period. This totals £4 million; and
- An additional payment of £1 million to Ofgem’s Voluntary Redress Fund (administered by the Energy Saving Trust).
This agreement, coupled with the actions taken by E.On in response to the PO, concludes this matter.