Ofgem has closed compliance engagement with E.ON relating to Direct Debit payments being taken earlier than agreed from 1.6 million customers. Most of the payments were due to be taken in early January but E.ON erroneously took these Direct Debit payments, on 24 December 2020. Taking these payments earlier than agreed over the Christmas period may have caused customer detriment and, in particular, could have adversely impacted customers in poverty or vulnerable circumstances.
E.ON self-reported this issue to Ofgem on 24 December and continued that engagement throughout January and February 2021. Ofgem requested information relating to this error. As part of that request, E.ON told us that they had made redress and goodwill payments totalling £55,039 to customers who suffered additional bank charges or out of pocket expenses as a result of the Direct Debits being taken early and had contacted E.ON.
E.ON has committed to continue to make redress and goodwill payments for bank charges, out of pocket expenses and other detriment to customers that make legitimate claims in respect of this issue. We expect E.ON to consider these claims sympathetically and continue to process them efficiently. Customers who experienced any of these issues should contact E.ON to make a claim.
Additionally, E.ON estimated the maximum detriment that this error could have caused customers and will pay an equivalent amount (£427,312) into the Voluntary Redress Fund. E.ON will also pay £200,000 into the fund in recognition of its failure to address underlying system and governance weaknesses which would have prevented this from occurring. This has brought the total Voluntary Redress Fund payment to £627,312.
We have agreed to close engagement following commitments from E.ON to address the root causes of the issue and compensate any customers that suffered detriment.
The issues were as follows:
Ofgem considers that when E.ON decided to change friendly credit hours for PPM customers between Christmas and New Year, it failed to conduct the appropriate checks to ensure that this would not lead to any unintended consequences for customers. Although E.ON would normally have taken these payments at a later date, Ofgem nonetheless takes these failures by E.ON very seriously as it impacted a large number of customers in the run up to Christmas, where finances for many may have already been stretched.
Expectations for all suppliers:
[1] Friendly-hours Credit means an amount of credit provided overnight, at weekends and public holidays to a Domestic Customer when that Domestic Customer’s Prepayment Meter credit runs low or runs out to ensure continuity of electricity supply or return on supply.