Utility Warehouse charged 3,430 potentially vulnerable customers more than allowed under the energy price cap and will be issuing them refunds and compensation.
Affected customers were all in receipt of the Warm Home Discount, which provides people on pension credit or certain benefits £140 off their winter energy bills. Due to a systems error, Utility Warehouse charged those customers more than allowed under the price cap by a total of £150,000 between January and November 2019.
The supplier will now be issuing refunds to those customers, as well as compensation worth double the amount they were overcharged. The payments—averaging £132 per affected household, including a £44 refund and £88 in compensation—will be applied automatically to customers’ January bills.
A Utility Warehouse spokesperson said: “A small number of affected customers were mistakenly categorised within the price cap, which led to an overcharge.
“As soon as we realised the mistake we reimbursed them for the overcharge, gave them an additional credit on their account and put them onto the correct tariff.”
Utility Warehouse will also pay £200,000 into Ofgem’s voluntary redress fund, which supports vulnerable energy customers, for a total payout of £650,000 for the error.
“The total redress packages 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,” the regulator said in a statement.
Ofgem said it decided not to pursue formal enforcement action against Utility Warehouse because the supplier had self-reported the issue after discovering it in December and worked quickly to fix the errors and ensure they don’t happen again.
But Utility Warehouse isn’t in the clear yet.
In June 2018, the watchdog opened an investigation into Utility Warehouse’s treatment of consumers in debt, inquiring into whether the supplier has appropriate repayment options and whether it is using prepayment meters appropriately as means of recovering debt.
Ofgem widened the scope of the investigation in October 2019 to include Utility Warehouse’s performance and reporting on social obligations—its commitments to help customers in vulnerable situations and in debt.
Utility Warehouse supplies 600,00 customers with energy, broadband and mobile phone services.
Utility Warehouse wasn’t the only supplier being scolded by Ofgem this week. Rapidly growing Ovo Energy will also pay £8.9 million into Ofgem’s redress fund for billing errors that affected more than half a million customers over three years.
