Utility Warehouse is to refund and compensate 3,430 Warm
Home Discount customers with £450,000 after it overcharged them,
due to a system error, when the price cap was applied.
The supplier will pay a further £200,000 into Ofgem’s
voluntary redress fund, in recognition of the seriousness of the
breach and the impact on potentially vulnerable
customers.
In December 2019, Utility Warehouse discovered that 3,430
of its customers who receive the Warm Home Discount payment, but
pay for their energy when they receive a bill, were paying above
the correct default tariff cap level between January and November
2019.
Utility Warehouse quickly self-reported the issue to Ofgem,
confirming that an overcharge of £150,000 had occurred. The
supplier’s systems were swiftly updated to correct the
issue.
Utility Warehouse is in the process of issuing full refunds
to all 3,430 customers who were overcharged, in addition to an
extra £300,000 of proactive goodwill payments.
An additional £200,000 will be paid into Ofgem’s voluntary
redress fund by Utility Warehouse.
Suppliers must be vigilant and ensure that customers,
including the vulnerable, are treated fairly. Ofgem’s Enforcement
Guidelines strongly encourage companies to promptly self-report
potential breaches that may give rise to material harm to
consumers, the market or to Ofgem’s ability to regulate.
The total redress package secured by Ofgem reflects the
seriousness of the breach, Ofgem’s commitment to protecting the
needs of customers who may be likely to be in
vulnerable circumstances, and Ofgem’s
zero-tolerance approach to compliance with the price cap
requirements.
While the overcharging of potentially vulnerable Warm Home
Discount customers is a serious matter which must be addressed,
Ofgem has decided not to require a larger overall package or to
take formal enforcement action on this occasion. 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.
Ofgem closely monitors all suppliers’ conduct, including
their approach to the implementation of the cap, and will
continue to hold suppliers to account if they do not meet their
obligations.
Notes to editors
· About
11 million households are protected by the default tariff cap,
which came into effect on 1 January 2019. The cap is temporary,
and applies to tariffs for all customers on standard variable and
default energy tariffs. Suppliers can price to the level or below
the cap, but cannot charge more.
· The
default tariff cap is currently £1,179 per annum for the period
between 1 October 2019 and 31 March 2020 for households on dual
fuel, single-rate based on typical consumption.
· Under
the requirements of the default price cap, customers who receive
the Warm Home Discount payment should not pay more than the lower
Direct Debit level of the cap, regardless of how they pay for
their energy.
· For
more information about Ofgem’s voluntary redress fund,
see: Ofgem appoints Energy
Saving Trust to distribute payments from rule-breaking energy
companies to charities
· More
information on the default tariff cap can be found on
our website.
· More
information of Ofgem’s Enforcement Guidelines can be found on
our website.
