Energy suppliers pay out £7m after overcharging 34,000 customers

Ten energy suppliers have paid out around £7m in compensation and refunds after an error led to some customers being overcharged, the energy watchdog has said.

Industry regulator Ofgem said the compensation and refunds will have been paid out to more than 34,000 customers.

It said this included more than 20,000 customers at the UK’s largest supplier Octopus Energy, which paid out £2.64m in refunds and made a £546,278 goodwill payment.

The error also impacted customers at Utility Warehouse, Ovo Energy, So Energy, Outfox The Market, Ecotricity, E.On Next, Tru Energy, Rebel Energy and EDF Energy.

Utility Warehouse paid out more than £2m in refunds after 8,272 of its customers were overcharged.

Ofgem said the issue – which took place between January 2019 and September 2024 – affected customers with more than one electricity meter point at their properties recording energy usage.

Suppliers can apply multiple standing charges for homes with multiple meters but Ofgem said this resulted in some customers being “erroneously charged more than is allowed under the price cap”.

The latest Ofgem price cap would see an average household with an annual energy bill of £1,738.

Charlotte Friel, director of retail pricing and systems at Ofgem, said: “We expect all suppliers to have robust processes in place so they can bill their customers accurately.

“While it’s clear that on this occasion errors were made, thankfully, the issues were promptly resolved, and customers are being refunded.

“Today’s outcome serves as a reminder to all energy suppliers that they must implement the price cap properly and do their due diligence.

“It also shows that, where appropriate, Ofgem is prepared to work with suppliers that fail to comply with our rules.”

The regulator said all ten suppliers have since updated their systems and processes to stop the issue recurring.