E.ON Next to send 100,000 customers £144 payments

Energy company E. ON Next has been ordered to pay £14.5 million in compensation and redress to customers on prepayment meters, according to industry watchdog Ofgem. It's estimated that around 100,000 customers will receive £144 each, while another 150,000 will have their energy debt written off. The regulator found the firm guilty of failing to provide final bills and refund customer credit balances to prepayment meter customers.

An investigation revealed nearly 250,000 prepayment meter customer accounts were affected between February 2021 and September 2023 due to a billing system error, which E. ON Next self-reported to Ofgem.

As a result, prepayment customers who switched to another supplier or ended their contract did not receive final bills within six weeks, as required by Ofgem’s rules. E.ON Next also failed to make mandatory compensation payments of £30 or £60 under the Supplier Guaranteed Standards of Performance (GSoP). Because they didn't receive a final bill, affected customers were unaware of the average £51 credit remaining on their accounts and were not automatically refunded.

Ofgem stated that due to these failures and recognising the impact on its customers, many of whom may have faced financial difficulty, the company has agreed to pay a total of £14.5million in compensation and redress payments, with each customer account receiving on average £144.

E. ON Next is set to pay a substantial package including £4.7 million in credit refunds, £6.6 million in compensation, and an extra £3.2 million to affected customers who have been difficult to trace. In such cases, E. ON Next has agreed to contribute additional sums to the Energy Industry Voluntary Redress Fund, which supports energy consumers, especially those in precarious circumstances.

On top of this, the supplier has also decided to voluntarily write off debts for nearly 150,000 prepayment meter customers whose accounts were closed from February 2021 through September 2023. E. ON Next made sure to reach out to all affected account holders who could be identified, and the company has since overhauled its billing system and protocols to rectify the underlying issues, securing that final bills will be issued to prepayment meter customers.

Beth Martin, Ofgem's director for consumer protection and competition, commented on the matter: "Prepayment meter customers are more likely to face financial difficulties, and during a period where households have been facing a significant cost of living crisis, it’s unacceptable that consumers did not receive refunds for credit that was owed to them, or final bills they are entitled to."

"E.ON Next has demonstrated an understanding of the significant impact this issue may have had on its customers, and it’s encouraging that they self-reported the issue and have worked with us to resolve it, and compensate affected customers to put things right. The action to write off debt will also offer affected households peace of mind."

"We are committed to driving up standards in the retail market so each and every customer gets the service they deserve from their energy company. If we see companies failing to act in the interest of their customers, we can and will take action."