An investigation by the energy regulator, Ofgem, has found over
34,000 prepayment meter customer accounts with Octopus between
2014 and October 2023 did not receive final bills within six
weeks, as required under Ofgem's rules.
In recognition of the impact these issues may have had on
prepayment meter customers, many of whom may be vulnerable,
Octopus agreed to pay a total of £1.483million in compensation
and redress. The average sum paid per affected customer was
£43.
This includes refunds of £231,000 of credit that was remaining on
accounts when they were closed, and a further £1,250,000 in
compensation to affected customers.
Although customers have sight of their balance on prepayment
meters, it is right that a final bill is produced in order to
give them a clear indication of their final debit or credit
position. Ofgem also recognises that suppliers do not always
benefit from credits left on a prepayment meter account as these
funds may be used by the new owner or tenant. However, this money
is nonetheless owed to the customer who has accrued the credit
and should be returned.
Beth Martin, director for consumer protection and
competition at Ofgem, said:
"It's important that customers receive final bills in accordance
with our rules, so they are aware of any credit remaining on
their accounts and can reclaim it. This is particularly important
for prepayment meter customers who are more likely to be in
financial difficulty.
“We are pleased that Octopus has now rectified the error and put
things right with its customers, offering both refunds and
compensation where it's due.
“We will continue to closely monitor compliance with our billing
rules, and drive improvements in the sector so customers can
expect the highest standards of service from their energy
supplier.”
The issue was identified after E.ON Next self-reported the same
error to Ofgem. A detailed investigation followed, and Octopus
has now updated its billing processes and systems ensuring PPM
customers will receive final bills when their accounts are
closed.
ENDS
Notes to Editors
Any funds that remain unclaimed, such as where a customer cannot
be contacted following multiple attempts, will be paid to the
Energy Industry Voluntary Redress Fund (EIVRS) which funds
projects and schemes to support energy consumers, particularly
those in vulnerable situations. Octopus also voluntarily wrote
off debt held by customers that closed their accounts during the
period of non-compliance.
The total sum paid also includes compensation payments to
customers for breaching Guaranteed Standards of Performance
(GSoPs).
Octopus has attempted to contact all customers affected using
details on file. Where this was not possible, Octopus instructed
a third-party tracing agency to attempt contact.
Where possible, payments have been made directly to customer
accounts; where not possible cheques have been sent, with the
expiry date of these cheques still to pass. It is expected that
all contactable customers will receive refunds/compensation by
September, at which stage any monies not claimed will be paid
into the EIVRS.
Ofgem has also highlighted the importance of suppliers being open
and cooperative with the regulator, and self-reporting instances
of non-compliance if issues are identified to ensure the impact
on customers is minimised.
It is important that suppliers understand their obligations
under:
-
Standard Licence
Condition 27.17, the requirement to take all reasonable
steps to send a final Bill or statement of account of the
Domestic Customer's account within 6 weeks of the supplier
transfer or termination of the Domestic Supply Contract.
- Guaranteed Standards of Performance (GSoP) regulation 6CA
(2020) and regulation 8 (2015),
the requirement to make a standard (compensation) payment of
£30 within 10 working days of the supplier's failure to issue a
customer a final bill within 6 weeks of the supplier no longer
having responsibility for the supply of electricity or gas. If
the supplier fails to make a standard payment on time it must
make an additional standard payment of £30 within a further 10
working days. To note, An increased compensation payment level
of £40 took effect from 2nd January 2025, however £30 was
applicable during the period of non-compliance Supplier Guaranteed
Standards of Performance (GSOP) Payment Uplift |
Ofgem
-
Standard Licence
Condition 5A, the requirement to be open and cooperative
with Ofgem. The licensee must disclose any actions or omissions
that give rise to a likelihood of detriment to Domestic
Customers.
