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E.ON to pay £1.4 million to customers

E.ON has agreed to pay back 94,000 customers who were incorrectly charged exit fees or overcharged after price rises.

The energy regulator Ofgem has secured the commitment from the big six supplier to pay back exit fees either incorrectly charged or overcharged to customers following price rises.

E.ON fell foul of Ofgem’s rules, which require all suppliers to give 30 days notice in advance of a price rise so customers can switch before it takes effect. If the customer wants to switch within this 30 day window they do not incur exit fees, even if they switched after the price rise took effect.

E.ON has identified 94,000 customers who will now receive an average rebate of £14.83, including 8% interest on the amount they were overcharged by.

In addition the energy supplier will give £300,000 as a goodwill gesture to a consumer fund which they run in partnership with Age UK.

E.ON ‘very sorry’

The news comes following a recent spate of price rises, with E.ON the only remaining big six supplier to not push up its prices.

However, E.ON was also forced to downgrade its profit warning for 2013 recently, and speculation in some papers suggested a price rise could be announced as early as mid-December.

David Bird, Customer Service Director, E.ON UK said: “We are very sorry to have let down some of our former customers and have made clear that we will refund the money plus interest. Our systems are being updated to ensure this mistake can never happen again.

Sarah Harrison, Ofgem’s Senior Partner in charge of enforcement said: “Ofgem has put in place protections for consumers so they can get a fair warning if their supplier puts up prices and time to shop around for a better deal.

“E.ON has accepted it failed to meet these protections. Today’s announcement that E.ON will compensate customers is a positive step by the company to put right their mistakes and is welcome.”

What we say

Ann Robinson, Director of Consumer Policy at uSwitch, says: “This announcement is very welcome. Ofgem and E.ON are taking a good and sensible approach which will ensure that customers are not left out of pocket. It’s also good that more vulnerable households will benefit from the goodwill gesture being made to the consumer fund that E.ON runs in partnership with Age UK.

“Today’s announcement also sends a very timely reminder to consumers that if they are unhappy about their supplier increasing its prices they are free to switch to a better deal. Suppliers now have to give you 30 days’ notice and you will not incur exit fees or the higher charges as long as you let your supplier know that you are leaving during this timeframe.

“With some announced price rises yet to come into effect, consumers can still enjoy this window of opportunity.”