E.On must pay the compensation due to poor customer service after a review of their complaints and long call wait times.
Throughout 2022, Ofgem conducted a series of Market Compliance Reviews (MCRs) to examine energy suppliers’ performance in key areas across the sector in a bid to drive up standards.
Their review uncovered “severe weaknesses” at E.On Next, with customers facing long call waiting times and a high level of unanswered calls.
Over half a million customers may have been affected, the regulator stated.
As compensation, E.On will pay £4million out to those customers directly affected – this works out to £8 each.
They will also pay a further £1 million to Ofgem’s voluntary redress fund, which supports vulnerable energy consumers and other innovation and carbon emission-reducing investments.
Cathryn Scott, director for enforcement and emerging issues at Ofgem, said the penalty for E.On Next “shows Ofgem’s determination to stand up for the rights of consumers and drive up standards”.
She continued: “The very least that a customer should expect of their supplier is for them to pick up the phone to them in a timely way.
“The levels of service that we discovered at E.On Next during the period of review were unacceptable.
“As the energy regulator, our purpose is to protect energy consumers and this action serves as a reminder to all suppliers that they must ensure that their customers are able to contact them quickly and easily when they need to.
“This is particularly important during this time of volatile energy prices when many households are struggling with their bills.”
This comes after E.On Next was ordered to pay a total of £5.5million to almost 95,000 customers for failing to act within the time frame when switching customers over.
Last month, Ofgem ordered three energy providers to pay compensation to customers after they failed to provide a final bill within six weeks after the customers switched to a new provider.
E.ON Next, Good Energy and Octopus Energy paid a total of £8million to energy customers for delaying or failing to make statutory compensation payments.
Thousands are now due compensation payments worth up to £60 as they either missed or unduly delayed their duties. The payment is for any switching delays that occurred in May 2020. Ofgem has urged any customers who have not received their compensation to contact their energy supplier at the time, such as E.On Next, Good Energy and Octopus Energy.
An E.ON spokesperson said: “We had invested in improving our services even before Ofgem began its review, prioritising our most vulnerable customers with specialist teams and recruiting hundreds more Energy Specialists to be there for customers when they need us. We won’t shy away from the fact that we weren’t at our best but we’re heartened Ofgem recognises our efforts and our success in improving service levels even before this review began. We hit our agreed targets with Ofgem on day one and we’ve stayed there ever since.”
