E.ON fined £650,000 for taking direct debit payments early

Saleha Riaz
·2 min read
essen, North Rhine-Westphalia/germany - 02 11 18: e.on headquarter in essen germany
E.ON self-reported the issue to Ofgem and made redress and goodwill payments of £55,039 to customers who contacted the supplier to complain. Photo: Getty

UK regulator Ofgem fined gas and electricity supplier E.ON (EOAN.DE) £650,000 ($904,354) for taking direct debit payments earlier than agreed for 1.6 million of its customers.

Most of these payments should have been taken out of customers accounts in January 2021, but E.ON did so on 24 December 2020.

“This meant customers may have experienced out of pocket expenses; unexpected overdraft bank charges; difficulty making payments in the run up to Christmas; and other unforeseen circumstances,” Ofgem said.

The mistake was due to a technical fault, following changes the German-based company made to credit hours for pre-payment customers between Christmas and New Year.

But Ofgem said E.ON should have conducted appropriate checks to ensure that this would not lead to any unintended consequences for customers.

E.ON self-reported the issue to Ofgem and made redress and goodwill payments of £55,039 to customers who contacted the supplier to complain.

Affected customers who haven’t already spoken to E.ON should do so if they wish to make a claim for any issues that the early payments may have caused them.

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E.ON will pay £627,312 “in recognition of its failure to address underlying system and governance weaknesses, which would have prevented the error from occurring, to the energy redress fund,” Ofgem said.

The fund provides money to charities to deliver energy related projects that support energy consumers in vulnerable situations.

It also helps to deliver benefits to consumers, who were negatively impacted by the specific issue that triggered the redress payment.

“Ofgem expects suppliers to adhere to the terms of contracts they have with customers, in particular the agreed direct debit payment dates,” said Anna Rossington, director of retail at Ofgem.

“Ofgem is always prepared to work with suppliers who have failed to comply with their obligations, but who have self-reported and are determined to put things right, as E.on has done,” she added.

Last month, Ofgem said more than a million UK energy customers that switched providers could have been overcharged due to errors made by suppliers, which included E.ON.

In total 18 suppliers made errors leading to excess bills totting up to £7.2m. The refunds, plus compensation meant payouts of £10.4m.

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