OVO to pay £2.37m for customer complaint failures

OVO Electricity Ltd, OVO (S) Gas Ltd, and OVO Gas Ltd have agreed to pay a total of £2.37 million in compensation and redress payments after Ofgem identified a number of failings in how the supplier handled customer complaints.  

The regulator identified that 1,395 OVO customers were affected by issues including lengthy delays in addressing complaints, in some cases up to 18 months, and delays actioning the Energy Ombudsman's decision when complaints were progressed.  

OVO will pay £378,512 in compensation directly to affected customers and has also paid an additional £2million to the Energy Industry Voluntary Redress Scheme in recognition of the severity of consumer detriment caused.  

Affected customers will be contacted directly by OVO, and do not need to take any action. 

Following Ofgem's intervention OVO has increased its complaint handling resources, enhanced its complaints management system and improved its case management processes to make sure senior colleagues have oversight of complaints. 

Jacqui Gehrmann, deputy director of retail compliance at Ofgem, said: 

“Energy is an essential service. When things go wrong, it can cause consumers a lot of distress. In this case OVO failed to adequately protect and respond to their customers when it was needed most. This is not acceptable. 

“Consumers deserve a clear and timely response when they make a complaint, and that's why we stepped in quickly when we identified that OVO's performance was falling below acceptable standards.   

“We are committed to driving up standards for consumers across the board, and this action serves as a reminder to all energy companies that we will not hesitate to take swift and definitive action when they fail to comply with the rules.” 

Ofgem first engaged with OVO last June after reported concerns over the time taken to address complaints referred by Citizens Advice Scotland's Extra Help Unit, and to action decisions from the Energy Ombudsman. 

The regulator identified key areas of improvement including upgrading its complaint handling system and addressing resourcing issues. Ofgem then asked OVO to provide a plan on how it would address and resolve these issues. 

Ofgem has collected more than £400million in payments since 2020 through their compliance and enforcement activities which has been used to help households struggling with their bills.   

In 2023 alone, Ofgem recovered a total of £77.2 million in fines, customer refunds, compensation and alternative action payments – up by £50.5 million compared to 2022. 

Natasha Gilmour, head of operational support at Citizens Advice Scotland, said: “The Extra Help Unit is a GB-wide service managed by Citizens Advice Scotland to help vulnerable consumers experiencing difficulties with their energy suppliers. 

“While it's rare for a compliance case to be necessary to resolve such issues, it is reassuring to see how OVO has responded to the investigation by Ofgem, and we are satisfied that the new practices implemented are ensuring good and timely outcomes for our clients.” 

“We've worked closely with energy suppliers since 2008 and we're hopeful these relationships will continue to grow as we work together to improve outcomes for consumers needing our support.” 

The Energy Ombudsman commented: “We welcome today's news that following compliance engagement between Ofgem and OVO, consumers will be compensated for OVO's failures to implement the remedies set by the Energy Ombudsman.  

“Our role is to resolve disputes between consumers and energy suppliers, providing independent and impartial decisions that ensure fair outcomes. These decisions are legally binding, and suppliers are required to implement them within 28 days. While the majority of resolutions are carried out on time, there are instances where consumers face unacceptable delays. 

“It is reassuring to see that this investigation is now concluded, and that OVO has reviewed and improved its systems and procedures.”   

Notes to editors

Energy companies regulated by Ofgem that breach their licence conditions may be asked to pay a sum of money to the Energy Industry Voluntary Redress Scheme to remedy any harm caused to consumers.  

The Energy Redress Fund provide money to charities to deliver energy related projects that support energy consumers in vulnerable situations. It also helps to deliver benefits to consumers, who were negatively impacted by the specific issue that triggered the redress payment. 

OVO Electricity Ltd, OVO Gas Ltd and OVO (S) Gas Ltd are OVO Energy's licensed supply companies and are referred to as ‘OVO' or ‘OVO Energy' in the above press release. 

On licensees 

1. SLC 0 provides that licensees must treat domestic customers fairly.  

2. SLC 4A requires licensees to maintain robust internal capability, systems and processes to enable them to efficiently and effectively serve each of its customers; efficiently and effectively identify likely risks of consumer harm and to mitigate such risks; and comply relevant legislative and regulatory obligations. 

3. All redress payments from regulated person are payable to the Energy Industry Voluntary Redress Scheme. Since 2017 the Energy Saving Trust has been appointed by Ofgem to operate the scheme on Ofgem's behalf. 

4. Regulation 7 of the Gas and Electricity (Consumer Complaints Handling Standards) Regulations 2008 requires each regulated provider to allocate and maintain adequate resources for complaints handling