Octopus Energy has refunded nearly £1.5 million to its customers due to a significant billing mistake. An investigation conducted by Ofgem revealed that over 34,000 prepayment meter customers did not receive their final bills within the required six-week timeframe as mandated by the energy regulator.
The affected Octopus Energy customers, spanning from 2014 to October 2023, were compensated a total of £1.483 million. This compensation included £231,000 in refunds for remaining credits on closed accounts and an additional £1,250,000 in compensation for the impacted customers, with an average payment of £43 per customer.
Refunds and compensations have been disbursed directly to customer accounts or through mailed cheques, with the aim to complete all payments to reachable customers by September. In cases where customers cannot be contacted, the funds will be directed to the Energy Industry Voluntary Redress Fund (EIVRS) to support households facing financial difficulties.
Beth Martin, Ofgem’s Director for Consumer Protection and Competition, emphasized the importance of customers receiving final bills promptly to be aware of any remaining credit on their accounts. Martin commended Octopus Energy for rectifying the issue and providing refunds and compensations to affected customers as necessary, reiterating Ofgem’s commitment to ensuring energy suppliers adhere to billing regulations for the benefit of consumers.
Octopus Energy disclosed that it voluntarily cleared the debts of impacted customers and revised its billing procedures following the investigation. The energy company also highlighted that it charged prepay customers approximately £70 below the regulated price cap.
Rachel Fletcher, Octopus Energy’s Director of Economics and Regulation, emphasized the company’s dedication to prioritizing customer interests and striving for positive outcomes despite industry challenges. Fletcher urged Ofgem to focus on reducing energy costs and prioritizing consumer welfare over policy decisions.
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