By Ian Walker
LONDON--Electricity firm E.ON SE (EOAN.XE) is to make a 7.75
million-pound ($11.54 million) penalty payment to Citizens Advice
after the U.K. energy regulator Ofgem said the utility had
overcharged some of its customers.
E.ON incorrectly charged exit fees and/or overcharged customers
following price rises, the regulator said. This latest penalty
payment is in addition to the GBP400,000 that E.ON has already paid
back to potentially affected customers. It also said E.ON is in the
process of refunding remaining customers to ensure they didn't lose
out financially.
Under Ofgem rules, suppliers must give customers 30 days' notice
of a price rise to allow them the chance to switch before the
increase takes effect. If a customer signals their intention to
move supplier within the period, they don't incur exit fees or the
higher charge even if the switch occurs after the price rise.
E.ON was found to have made billing errors in respect of price
rises in January 2013 and January 2014, Ofgem said.
Ofgem said the level of penalty reflected the fact that E.ON has
made the same error previously as well as making senior level
commitments that it rectified its processes. Also taken into
account was that E.ON notified Ofgem of the billing issues and has
cooperated throughout the investigation.
"E.ON's errors meant customers who took the chance to switch
were wrongly charged. It is important that E.ON has repaid
potentially affected customers and cooperated with the
investigation. However it's absolutely unacceptable that E.ON
failed to provide these vital customer protections yet again and
this persistent failure is the reason for the high penalty," said
Sarah Harrison, senior partner in charge of enforcement at
Ofgem.
Write to Ian Walker at ian.walker@wsj.com; @IanWalk40289749
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