Utility Warehouse to pay £450k for overcharging energy customers

The supplier will refund and compensate 3,430 Warm Home Discount customers for charging them above the default tariff cap level

Utility Warehouse has agreed to pay a total of £650,000 after overcharging customers when the energy price cap was applied.

The energy supplier will refund and compensate 3,430 Warm Home Discount customers with £450,000 for charging them above the correct default tariff cap level between January and November 2019.

Around 11 million households are protected by the default tariff cap – currently set at £1,179 a year until 31st March 2020.

Utility Warehouse quickly self-reported the issue to Ofgem, confirming it overcharged customers by £150,000, following which the supplier updated its systems swiftly to correct the issue.

The energy company is in the process of issuing full refunds to all customers who were affected, in addition to an extra £300,000 of proactive goodwill payments.

An additional £200,000 will be paid into Ofgem’s voluntary redress fund.

The regulator said while the overcharging of potentially vulnerable customers is a “serious matter” which must be addressed, Ofgem decided not to require a larger overall package or to take formal enforcement action on this occasion.

Ofgem said: “This is due to the steps Utility Warehouse has taken to report the matter to Ofgem, correct the situation and quickly put in place measures to ensure this issue will not re-occur.”

A spokesperson from Utility Warehouse added: “As soon as we realised the mistake we reimbursed them for the overcharge, gave them an additional credit on their account and put them onto the correct tariff.

“We have been working closely with Ofgem since identifying the issue and have also made a significant voluntary contribution to the Energy Redress Scheme, which helps consumers in vulnerable situations, those negatively impacted by energy company issues and funds the development of innovative energy products and services.”

OVO Energy, which has bought SSE’s retail business for £500 millon, is also paying £8.9 million for issuing customers with inaccurate or incomplete information and overcharging them.

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