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E.ON to pay back £1.4m in wrongly charged exit fees

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28/11/2012
E.ON is being forced by energy watchdog, Ofgem, to pay back £1.4m that the energy supplier had wrongly charged in exit fees.

Approximately 94,000 consumers were incorrectly charged exit fees or overcharged following price rises. 

On top of the £1.4m that E.On is to pay back, the energy supplier will make an additional £300,000 as a goodwill gesture to a consumer fund which they run in partnership with Age UK.

Audrey Gallacher, Director of Energy at Consumer Focus, said: “We welcome Ofgem acting on evidence that fixed-term deal customers lost out when E.ON incorrectly charged termination fees after price rises. Customers need guarantees that energy suppliers play fair on penalty fees and price rises – particularly given the high level of consumer distrust of the energy market.

“Today’s agreement sends a welcome message to the energy industry that not sticking to the rules has repercussions. It is positive that E.ON worked with the regulator to get this money back to customers who lost out, rather than paying a fine which would go back to the Treasury.”
E.ON is making these payments in recognition of failings against licence obligations.
Under Ofgem obligations, suppliers have to give customers 30 days notice of a price rise; this allows customers the chance to switch before the increase takes effect.
If a customer signals their intention to move supplier within this timeframe they do not incur exit fees or the higher charges, even if the switch occurs after the price rise.

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