E.On UK to pay £1.7m in compensation after overcharging blunder
COVENTRY-headquartered energy giant E.On UK has apologised and agreed to pay £1.7m in compensation after it overcharged 94,000 customers following price rises.
Some £1.4m is being paid directly to customers who were overcharged on exit fees. They will receive an average rebate of £14.83 each.
The other £300,000 will be paid into a hardship fund run by charity Age UK.
Regulator Ofgem said the compensation related to four price rises that occurred between 2008 and 2011.
E.On made errors during a 30-day window that allows customers to switch supplier before a price rise.
During that time, industry rules mean customers on fixed-term deals should not incur an exit fee if they signal their intention to switch supplier.
If they make this intention clear, they should also avoid any higher prices if the switch happens after the price rise comes into effect.
David Bird, E.On UK customer service director, said: “We are very sorry to have let down some of our former customers and have made clear that we will refund the money plus interest. Our systems are being updated.
“We have been open in our failure with the energy regulator Ofgem and are pleased to have agreed with them how we can put this right and have identified all customers who are due to receive payment from us in January.”
Ofgem said that E.On brought the error to its attention in November and had agreed to compensate customers rather than face an investigation and a potential fine.
E.On UK is part of E.On, the world’s largest investor-owned power and gas company which has its headquarters in Germany.
Earlier this month E.On issued a profits warning, saying its “previous 2013 forecast no longer seems achievable”, blaming “substantial economic uncertainties”.
