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E.ON to pay £650,000 compensation for payment error

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Written by: Emma Lunn
23/04/2021
Energy supplier E.ON has agreed to pay out more than £650,000 to customers after it took about 1.6 million customers' direct debits up to two weeks early in December.

On Christmas Eve, E.ON incorrectly took direct debit payments that were supposed to be taken in January from its customers’ accounts. The billing blunder left many customers without cash in their accounts just before Christmas, and some facing additional overdraft charges.

E.ON has agreed to make goodwill payments to compensate customers affected by additional bank charges and pay an additional £627,312 to the energy redress fund.

The affected payments were taken due to a technical fault, following changes E.ON made to friendly credit hours for prepayment customers between Christmas and New Year.

Energy regulator Ofgem said that E.ON failed to conduct the appropriate checks to ensure that this would not lead to any unintended consequences for customers.

E.ON self-reported the issue to Ofgem on 24 December and continued to engage throughout January and February 2021.

It has made redress and goodwill payments totalling £55,039 to customers who contacted the supplier to say they had suffered additional bank charges, out of pocket expenses or other detriment, as a result of the Direct Debits being taken early.

E.ON has committed to continue to make redress and goodwill payments for bank charges, out of pocket expenses and other detriments to customers who make legitimate claims regarding the mistake.

It will also pay £627,312 in recognition of its failure to address underlying system and governance weaknesses, which would have prevented the error from occurring, to the energy redress fund.

Anna Rossington, director of retail at Ofgem, said: “Ofgem expects suppliers to adhere to the terms of contracts they have with customers, in particular the agreed Direct Debit payment dates. This failure is a reminder to suppliers that when making changes to their systems, they need to undertake appropriate checks to avoid any unintended consequences for customers.

“Ofgem is always prepared to work with suppliers who have failed to comply with their obligations, but who have self-reported and are determined to put things right, as E.ON has done.”

Customers who have been negatively affected and haven’t already spoken to E.ON about it, should contact E.ON if they wish to make a claim for any bank charges or other detriment caused by the early direct debit payments.

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