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E.ON forced to shell out £1.7m after overcharging customers

John Fitzsimons
by Lovemoney Staff John Fitzsimons on 27 November 2012  |  Comments 7 comments

An average of £14.83 will be paid out to E.ON customers overcharged after price rises.

E.ON forced to shell out £1.7m after overcharging customers

E.ON has been ordered to pay back around £1.4 million to customers who were overcharged following price rises or wrongly charged exit fees.

The energy provider has also agreed to pay an additional £300,000 as a “goodwill gesture” to a consumer fund run by Ofgem and Age UK.

The 94,000 affected customers have been identified and contacted. They can expect an average rebate of £14.83, which includes 8% interest on the amount they were incorrectly charged.

What E.ON did wrong

According to Ofgem rules, suppliers must give their customers 30 days’ notice of a price rise in order that they may move elsewhere before the price rise kicks in.

If the customer tells the supplier they plan to move within this timeframe they should not incur exit fees or higher charges, even if the switch takes place after the price rise kicks in.

However, E.ON failed to follow these rules.

If you’re switching because of a price rise it’s incredibly important to keep these rules in mind and be extra vigilant when checking your energy bill to ensure that you haven’t been overcharged.

Even if you aren’t switching, make sure you’re paying the right amount – as we revealed in Energy companies keep £1.2 billion of our savings, more than half of us are paying more than we should each year, by an average of £80 a customer.

Cashing in

Energy firms are not exactly at their most popular currently, with five of the big six having announced price rises to cash in on the winter weather, despite many boasting impressive profits this year.

If you’re in the market for a new gas and electricity supplier, why not make use of our energy comparison tool?

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Comments (7)

  • Grobbendonk
    Love rating 28
    Grobbendonk said

    Given their immoral levels of profiteering, incompetence and general cheating, this is far too small a repayment. I'm glad they're doing it, but until they offer good services at a price that at least follows the actual wholesale rates, then they need to keep repaying. (By cheating, I mean that it's very clear that when wholesale prices rice, so do end-customer charges, but when the wholesale price falls, the end-customer prices do not)

    Report on 27 November 2012  |  Love thisLove  4 loves
  • LiamT
    Love rating 45
    LiamT said

    you have to wonder who in their right minds thought that we would all benefit from private energy companies.

    Report on 27 November 2012  |  Love thisLove  0 loves
  • Aitken B
    Love rating 146
    Aitken B said

    I agree with Grobbendonk but let's not let the regualator off the hook. If the industry were well "policed" the problem would not have occurred in the first place as E-On would have known that it would not get away with it.

    One onders how many other "nice little earners" they and others have got away with.

    And of course you cannot beat HMG for raiding consumers' pockets. £100 each per year to fund a scheme to stop Global Warming that has zero chance of succeeding. Of course putting another levy on our fuel bills will allow HMG to claim that this hopeless idea is not receiving a subsidy from the taxpayer.

    However, I for one will be hard pressed to recognise what we are told is the very important difference.

    Great business model though. Get HMG to force your victims sorry customers to fund your capital investment with out any benefit of a return (dividend) in prospect then screw them again when you sell them the vastly over-priced product of the generators they paid to build in the first place.

    What a cracker - it's like taking cake from a baby and all with the legislative assistance of the Government.

    And they (MPs) have the gall to lecture us about morality in taxation.

    Report on 27 November 2012  |  Love thisLove  7 loves
  • albatross5
    Love rating 50
    albatross5 said

    All these price issues are important and I welcome them being aired by the Love Money team. However, pseudo-green ideology from LibDumb Ed Davy and the EU has been noted by the Electricity Regulator, Ofgem as not only being responsible for huge price rises but also for high risks to the sustainability of the grid system in the near future to deliver 24/7 for 52 weeks per year.

    Power shortage risks by 2015, Ofgem warns

    BBC Business NEWS 5 October 2012

    Britain risks running out of energy generating capacity in the winter of 2015-16, according to the energy regulator Ofgem. Its report predicted that the amount of spare capacity could fall from 14% now to only 4% in three years.

    The regulator said coal-fired power stations would be closing sooner than expected. Ofgem said this would leave Britain relying more on imported gas, which would make price rises more likely.

    The government said that its forthcoming Energy Bill would ensure that there was secure supply. Ofgem blames the risk on coal-fired power stations being closed sooner than expected and EU environmental legislation.

    The warnings come in Ofgem's first annual Electricity Capacity Assessment. It comes three years after Ofgem's Project Discovery report, which warned that electricity shortages could lead to steep rises in energy bills.

    It is now saying the highest risk of shortages would be sooner than expected because coal-fired power stations would be closing sooner than it had predicted in 2009.

    Author adds: Osborn's gas initiative for many new gas fired power stations supported by Owen Paterson (in Environment) and John Hayes (in Energy) from a UK shale gas bonanza is a possible saviour for our energy prices and the continued reliability of supply On the other hand, wind subsidy farming is an expensive toy with no capability of having more than an intermittent and small contribution to electricity supply. Frack on for a brighter future.

    Report on 27 November 2012  |  Love thisLove  6 loves
  • edwardmk2879
    Love rating 65
    edwardmk2879 said

    Instead of spending vast sums of taxpayers money on boondoggle 'green energy' schemes, where the poor old taxpayer gets smacked once to build it, and then again to buy the more highly priced energy, we should be having a national push to improve insulation standards of homes. I know it's sort of going on now, but currently the focus has moved to overpaying people to stick PV panels on their roofs or to erect windfarms ( which are becoming deeply unpopular with the locals who have to look at and listen to them). Usually, when I pass a windfarm, if there is a lot of wind, they are shut down. If there is no wind, they are not working, and if the wind is like Goldilocks porridge, just right, half of them are off line for maintenance.

    My youngest sister took advantage of the government boondoggle for PV panels, and I can't blame her. Cash in her bank was at risk and earning peanuts, and now she's getting over 8% return on the thousands she 'invested'. The panels, on a perfect day, can just about heat a kettle. Meanwhile, the long suffering taxpayer picks up the tab to pay my sister. I'm betting the system will degrade and need expensive repairs long before there is a return on the investment. that goes for the windfarms too.

    I agree with albatross5 !00%. Let's be the first to sign long term contracts with the USA while the gas prices are at historic lows. Frack on here, frack on from over the pond. Then when Russia turns off the taps again, we'll be in a happier position.

    We should also stockpile nuclear fuel in a secure facility while uranium ore prices are depressed. It would be a sensible strategic move, even if we never needed it and just re-sold it in twenty years at an enormous profit.

    Report on 27 November 2012  |  Love thisLove  0 loves
  • sesojgbs
    Love rating 0
    sesojgbs said

    I have the key meter and I did find EON prices high when I first switched. I think I'will return to my previous supplier

    Report on 27 November 2012  |  Love thisLove  0 loves
  • electricblue
    Love rating 769
    electricblue said

    If we based our understanding of wind energy on the opinion of every dreary luddite who happens to notice that one particular array is static at any given time we might as well take advice on snow clearance from someone who lives in the Gobi desert. Wind and wave energy are inexhaustible and generator prices are coming down. Solar power is getting cheaper and more efficient all the time and energy neutral homes are easily achievable. Again, just because someone has a poor solar installation we are expected to take that anecdotal situation as a guide to the norm? Some cars only do 14mpg so all cars must be terrible on fuel, according to this nonsense logic. Other than bearings needing maintenance there is virtually nothing to go wrong with wind turbines and solar panels have been around long enough to know that when properly constructed they have a very long service life.

    Report on 27 November 2012  |  Love thisLove  2 loves

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