Business

E.On to pay £7.75m for overcharging its customers again

Steam rises from cooling towers at the coal-fired Kraftwerk Mehrum power plant at Haemelerwald Image copyright Getty Images

One of the UK's largest energy suppliers, E.On, has agreed to pay a further penalty of £7.75m for overcharging its customers.

The payment was ordered as a result of the company's "repeated failing" by the energy regulator, Ofgem.

Some customers paid too much in the process of switching. Others were wrongly charged exit fees.

E.on apologised to its customers, and admitted it was not the first time it had made the mistake.

In November 2012 the company paid a £1.7m penalty for the same thing, although the company said the underlying reason was different.

"It's absolutely unacceptable that E.On failed to provide these vital customer protections yet again, and this persistent failure is the reason for the high penalty," said Sarah Harrison, Ofgem's senior partner in charge of enforcement.

Bills

In the latest case, around 48,000 customers were potentially affected.

Many of those were in the process of switching to another supplier, after E.On announced price rises in January 2013 and January 2014.

But in the meantime their bills were increased anyway - against the rules.

Others were charged exit fees, even though customers are allowed to move without penalty when tariffs go up.

E.On said that in most cases customers were overcharged less than £10, and that it was continuing to provide refunds automatically.

Ofgem said that among those affected were 7,000 pre-payment customers, who tend to be the least well off.

The £7.75m will be paid to Citizens Advice, which welcomed the agreement.

"This ruling will send a strong message to the whole industry that consumer rights cannot be ignored," said Gillian Guy, the chief executive of Citizens Advice.

"The judgement is further proof that prepayment customers get a raw deal," she added.

In May 2014 E.On was fined £12m by the regulator for mis-selling - one of the largest fines imposed by Ofgem.

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