An estimated 18,000 customers were overcharged, meaning they weren’t protected as they should have been under either Ofgem’s energy price cap or the Government’s Energy Price Guarantee.

As part of the Ofgem investigation, OVO was found to have overcharged a total of 10,987 customers by £1.5m between October 2022 and March 2023.

Good Energy was found to have overcharged 6,966 customers a total of £391,650 between January 2019 and October 2022.

This was due to Good Energy’s failure in adjusting tariffs after customers changed their payment method.

Ofgem confirmed these customers don’t need to do anything as they will be automatically refunded and will receive compensation.

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The average amount to Good Energy customers stands at £181, while OVO customers will receive an average £109.

Further, Good Energy will pay £1.25m to Ofgem’s voluntary redress fund for its inadequate systems, processes and “repeated inaccurate reporting of information to the regulator over an extended period”.

OVO will pay £10,000 to the redress fund which helps vulnerable customers. Ofgem said the redress package “would have been considerably higher had OVO not quickly engaged Ofgem and resolved the issue in a timely manner”.

‘Totally unacceptable that customers were overcharged’

Dan Norton, deputy director of retail at Ofgem, said: “Protecting consumers is always our top priority, and we expect suppliers to ensure customers pay no more than the level of the price cap or Energy Price Guarantee – schemes put in place with the very purpose of helping people.

“It is totally unacceptable that Good Energy and OVO Energy customers were overcharged, particularly at a time that is already so challenging and stressful for consumers across the UK.

“Energy suppliers should hear this loud and clear: we expect suppliers to act with the utmost care and integrity. we will continue to hold them to account if they do not meet their customer protection or reporting obligations.”

‘We’re very sorry’

Nigel Pocklington, CEO of Good Energy, said: “We are very sorry that we let some of our customers down and promise to put things right. We have been contacting those impacted to apologise and issue their refunds and goodwill payments and will be fixing the issue so it does not happen again.

“The issue, which we reported to Ofgem as soon as it was apparent, originated in 2019. It meant that customers who switched payment method to direct debit were not receiving their discount for doing so.

“Every customer payment method change is now being checked and the formal improvement plan we have submitted to Ofgem includes new automated processes, standards and governance to prevent any similar mistake in future.”

An OVO spokesperson, said: “We’re very sorry to some of our fixed-price customers who experienced a delay in receiving the Energy Price Guarantee discount. We noticed immediately and self-reported the error to Ofgem. The issue has now been fixed and compensation has been paid as an apology. We have also made a voluntary contribution to the redress fund to help support customers in vulnerable situations.”