Ofgem fines E.On for serial overcharging

Following a two year investigation into the billing practices of energy company E.On, regulatory board Ofgem has released the findings and will be fining E.On almost £8m.

On top of the fine paid to the Citizens Advice community charity, E.On will have to refund upwards of £400,000 to customers. Citizens Advice is a charity that provides council and support to energy customers all over the UK who need help.

This is not the first time E.On have been in trouble with Ofgem, as last year they were fined £12m for incorrectly quoting and selling energy deals to customers. More than 500,000 households are thought to have been affected by these mistakes.

The main point of contention has been the lack of communication between E.On and their customers. Under current regulations, if the price of a household bill is going to increase, the energy company must give the customer 30 days notice, so that if they wish to, they can switch suppliers. There must be no exit fees or extra charges. In the January of 2013 and 2014, E.On continued to bill their customers at a higher rate without any warning.

The penalty is severe, but Ofgem said that they took into account that this was not the first time E.On had abused the consumer. Ofgem have said however, that E.On did alert them to the billing issue, and had fully co-operated with the investigation.

E.On issued an apology publically, acknowledged that this was not the first time it had happened, and is looking to fully refund all the customers that the billing issues have affected.

Ofgem commented that these over-billings were unacceptable, and higher and higher penalties would be inflicted for any future violations. This also serves as a warning to other energy companies that Ofgem are keeping a watchful eye on the energy suppliers.

Written by

Shay Ramani

Founder and Managing Director at Free Price Compare

Expert in Cost Saving and Financial Solutions