Last week, the governing regulator for gas and electricity, Ofgem, has ruled that 18 energy companies must compensate households over a breach of switching rules. According to Ofgem regulation, energy suppliers must honour the conditions of a customer’s existing tariff until the switch to another company has been completed. The 18 energy companies named in the memo from 2013 to 2020 purportedly raised costumer’s prices after they had been notified that the customers had decided to switch.
Although customers were able to switch, there is typically a window of around 2 weeks during which customers remain with their old supplier until the switch has gone through. As a result of this practice, customers were overcharged in total £7.2 million pounds. In turn, Ofgem has ordered suppliers to repay customers what they were negligently charged, and in some cases add on additional compensation. The total sum is set at £10.4 million in compensation.
Who was affected?
The price gouging is said to have affected customers on both standard variable tariffs and fixed rate tariffs who decided to change companies. Also, customers who remained with their company, but moved houses keeping their fix tariff did not have their contract honoured and were over charged.
If you believe you may be entitled to a refund consult the table below to see if your supplier is part of the Ofgem compensation scheme.
Which Suppliers Were Ordered to Pay?
|Supplier||Number of customers affected||Total overpaid||Total redress package|
|E (Gas and Electricity)||20,870||£68,777.23||£72,772.93|
|Green Star Energy||79,083||£664,661.00||£808,351.00|
|British Gas/ Centrica||141,415||£391,176.79||£1,269,095.47|
You should receive an automatic refund
Those affected will be notified by the suppliers and should automatically receive the refund. Ofgem adds that if you believe you are owed a refund or compensation and have not been contacted, you should raise a complaint with your old supplier, as they may not have your contact details on file.
In light of not being able to contact customers whose details have been lost, the companies have agreed to donate the portion of these customers compensation to the Energy Savings Trust redress fund. This fund is set up as a charitable bank to support vulnerable customers in energy-related matters.
If you need help choosing a new supplier, read our full guide.