More than a million households are due to receive refunds after 18 energy suppliers overcharged customers as they switched to another tariff or supplier, or simply left them at risk to higher prices.
Government energy regulator Ofgem said 18 energy suppliers will have to collectively pay £10.4 million ($14.4 million) back to consumers for contract renewal failures, saying they did not correctly protect customers' prices.
Between 2013 and 2020, Ofgem found that more than one million customers were overcharged in excess of £7.2m ($9.9m) after they decided to switch tariffs or suppliers.
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In a press release, it said several suppliers had 'self-reported' the issue, before all suppliers were asked to self-assess their practices, in turn revealing the extent of the problem.
Ofgem said suppliers have since agreed to refund 'all affected customers' and in some cases 'make goodwill payments to the tune of £10.4 million'.
Where it has not been possible to process refunds, suppliers have agreed to make payments to the energy redress fund.
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Customers affected include: 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.
Anna Rossington, interim director of retail at Ofgem said: "Customers should have confidence in switching and not be overcharged when doing so.
"This case sends a strong message to all suppliers that Ofgem will intervene where customers are overcharged and ensure that no supplier benefits from non-compliance.
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"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."
A total of 18 suppliers were found in breach of switching rules, with the figures in brackets representing the number of customers affected:
Bristol Energy (12,617)
British Gas/Centrica (141,415)
E - Gas and Electricity (20,870)
E.On (28,126)
EDF (79,083)
Engie (9,061)
ESB Energy (1,961)
Green Star Energy (79,083)
npower (2,030)
Octopus Energy (19,712)
Orbit (723)
OVO Energy (240,563)
PFP Energy (5,347)
Scottish Power (157,236)
Shell (225,823)
So Energy (10,514)
SSE (132,620)
Utility Warehouse (2,723)
Featured Image Credit: PA