Ovo Energy is to close its Interest Reward scheme on credit balances next month. Here’s what you need to know.
The energy supplier is writing to customers to let them know its Interest Reward scheme is to close from February 2024, with the exact date depending on a customer’s direct debit billing cycle.
The Interest Reward scheme allows billpayers to earn interest when their Ovo account is in credit, applied to balances above a customer’s direct debit amount.
It’s offered to customers who had been with Ovo before September 2021, and who are in credit by £100 or more.
YourMoney.com understands that currently customers earn 3% a year (calculated monthly) – not a market-leading offer when compared to the best easy access cash savings accounts available on the market now, but a nice bonus on your bill money.
In the email to customers, Ovo said the scheme is ending next month because “the rules around keeping energy account balances in credit have changed”.
Direct debit payments must be as accurate as possible and credit must not build up excessively.
“The aim is for your payments to accurately cover your energy usage over 12 months, leaving you with a balance of £0,” Ovo wrote on its webpage.
Ultimately, customers should be paying the right amount for their energy, without building up big reserves in energy accounts as it could mean you’ve paid more to your supplier than the amount used. However, naturally, households use more energy in winter months and less in summer months.
The energy supplier which launched in 2009 said the change to Interest Reward won’t affect your energy supply contract, with terms remaining the same.
However, for those on a fixed tariff, customers are able to leave penalty-free as Ovo will waive exit fees. For those on a Standard Variable Tariff (SVT), there are no exit fees.
Refund of extra Ovo energy credit
Customers will be given a choice of what to do with the excess credit, just as long as they leave one payment’s worth of credit in energy accounts.
Billpayers can request a refund by logging into their online accounts, selecting ‘payments’, then clicking ‘apply for a refund’.
Alternatively, customers can choose to lower future monthly payments. Here the extra credit can help adjust upcoming direct debit amounts. To select this option, go to the ‘payments’ section of your online account and then click ‘adjust your direct debit’.
In both scenarios, you’ll need to send Ovo an up-to-date meter reading.
If you need any help with your account, you can call Ovo on 0330 303 5063 between 9am and 5pm Monday to Friday.
What are Ofgem rules on credit balances?
As part of energy suppliers’ licence conditions, they must take “reasonable steps” to ensure direct debit levels are fair, and must explain why they’re set at this level.
If a customer has built up a big reserve, they’re entitled to ask for it back at any time. Suppliers must do so promptly unless they have reasonable grounds not to for active energy accounts.
For closed accounts, Ofgem has ‘guaranteed standards’ to make sure customers get their final bills and any money owed.
Suppliers have six weeks from a switch to automatically send a final bill. They also have 10 working days from a final bill to automatically refund a credit balance. Alternatively, customers can contact the supplier to claim a refund.
An Ofgem spokesperson said: “Protecting consumers is our top priority. We do encourage suppliers to help customers spread the cost of the more expensive winter months over a full year to help them manage their bills. However, we are clear that consumers can request their balance back at any time.
“We have strengthened the rules around direct debits to prevent excessive accumulation of consumer credit. Last year, we told suppliers to look at processes around direct debits, which resulted in 900,000 customers having their payments reviewed and adjustments made for miscalculations.
“Alongside this, we have put in place new reporting requirements to notify us when a supplier may be over-relying on customer credit balances. If necessary we can then tell suppliers to take action including ringfencing funds.”
Ofgem added: “Ultimately if we do not believe suppliers are acting in consumers’ best interests, including failing to refund credit balances in accordance with licence conditions, we will not hesitate to act. If customers are requesting their balances and not receiving it, they should complain to the supplier and then the independent Energy Ombudsman.”
Related: Millions of cash-strapped households build up £7bn in energy credit: How to reclaim
