The energy giant “struggled to cope with demand” during October and December 2022, which meant E.On Next provided a “poor standard of customer service”.

According to the ‘deep dive’ review which focussed on suppliers’ customer service, Ofgem found “severe weaknesses” at E.On Next, particularly relating to excessive call waiting times and high abandoned call rates.

During the last quarter of 2022, many customers were unable to speak to E.On Next or were forced to wait on hold for 18 minutes on average.

The energy regulator added there was an “unacceptable call drop-off rate” with 50% of calls failing to successfully contact the supplier.

Half a million customers were potentially affected, with those “most directly affected” set to receive a share of £4m (£8 each) which will be paid automatically.

An additional £1m will be paid into Ofgem’s Voluntary Redress Fund, a scheme which helps vulnerable households and funds local energy saving projects.

It comes just a month after E.On Next paid out £5.5m to almost 95,000 billpayers over delays or failures to make compensation payments relating to switches.

Ofgem said E.On Next started addressing the issues after it ordered it to make immediate improvements. As a result, call waiting times reduced to an average of less than five minutes and the dropped call rate fell below 10%.

E.On Next: ‘We weren’t at our best’

Cathryn Scott, director for enforcement and emerging issues at Ofgem, said: “This shows Ofgem’s determination to stand up for the rights of consumers and drive up standards.

“The very least that a customer should expect of their supplier is for them to pick up the phone to them in a timely way. The levels of service that we discovered at E.On Next during the period of review were unacceptable.

“As the energy regulator, our purpose is to protect energy consumers and this action serves as a reminder to all suppliers that they must ensure that their customers are able to contact them quickly and easily when they need to. This is particularly important during this time of volatile energy prices when many households are struggling with their bills.”

An E.On Next spokesperson, said: “We had invested in improving our services even before Ofgem began its review, prioritising our most vulnerable customers with specialist teams and recruiting hundreds more energy specialists to be there for customers when they need us.

“We won’t shy away from the fact that we weren’t at our best but we’re heartened Ofgem recognises our efforts and our success in improving service levels even before this review began. We hit our agreed targets with Ofgem on day one and we’ve stayed there ever since.”