During its compliance investigation, Ofgem discovered that approximately 18,000 customers were not provided with the intended protection.
Good Energy was found to have overcharged nearly 6,966 customers by a total of £391,650 due to operational failures in adjusting tariffs following changes in payment methods between January 2019 and October 2022.
Meanwhile, OVO Energy overcharged 10,987 customers by £1,492,917 from October 2022 to March 2023, surpassing the Government’s Energy Price Guarantee that was introduced last winter amidst rising energy costs.
Affected customers will receive automatic refunds and compensation, with Good Energy customers receiving an average of £109 and OVO customers receiving an average of £181.
Furthermore, Good Energy will pay £1.25 million to Ofgem’s voluntary redress fund for the inadequate systems, processes and repeated inaccurate reporting to the regulator over an extended period.
OVO will also contribute £10,000 to the redress fund for reporting issues.
The redress fund is designed to assist energy consumers in vulnerable circumstances.
Dan Norton, Deputy Director of Retail at Ofgem, expressed deep concern over the overcharging incidents, particularly during a challenging and stressful time for consumers across the UK.
Norton emphasised that suppliers must act with utmost care and integrity, as Ofgem will continue to hold them accountable for customer protection and reporting obligations.
In response to the news, Energy Security Secretary Grant Shapps said: “The government took unprecedented steps to protect households at a time when bills risked spiralling and families were dangerously exposed to volatile global energy costs as a result of Putin’s illegal invasion of Ukraine.
“It’s extremely frustrating to see in spite of these efforts some homes didn’t get the protection they deserved.
“It’s right these suppliers now pay the price for their oversight and offer redress to those wronged. I’m glad to see Ofgem taking action where suppliers have fallen short and using the proceeds to support vulnerable consumers.”