Energy regulator Ofgem found that 18 energy suppliers failed to correctly protect 1m customers’ tariff prices when they decided to switch companies or tariffs.
According to data from Ofgem, over 1m customers were overcharged by more than £7.2m over the course of seven years, due to the failure to adhere to price protection rules.
The supplier with more cases was British Gas/Centrica, followed by OVO energy, Shell and SSE.
Several of the suppliers self-reported the issue to Ofgem, the regulator said. All suppliers were then requested to self-assess their practices, which revealed that 18 suppliers were not compliant between 2013-2020.
The customers affected included those on a standard variable tariff who switched to another supplier but did not have their variable tariff price protected during the switch, customers on a fixed-term tariff who switched to another supplier but did not have their fixed term tariff protected during the switch, and customers on a fixed-term tariff who moved to another tariff with their supplier but did not have their fixed-term tariff protected during the switch.
Ofgem said that suppliers should have adequate arrangements in place to make sure these protections are applied to customers when they decide to switch.
The suppliers have agreed to refund all affected customers, and in some cases make goodwill payments, to the tune of £10.4m.
Anna Rossington, interim director of retail at Ofgem said: “Ofgem will intervene where customers are overcharged and ensure that no supplier benefits from non-compliance.
“It also shows that, where appropriate, Ofgem is prepared to work with suppliers who have failed to comply with the rules, but who are willing to self-report issues and put things right for their customers.”
