Ofgem investigated the company
Customers included many small businesses, Ofgem said(Image: Nadiia Melnykova via Getty Images)
An Ofgem investigation has led to customers of an energy company being refunded and given £50 compensation payments. The regulator said on Friday that the energy supplier would pay £525,000 and its director has agreed to step down following serious and persistent mismanagement that resulted in customers being overcharged.
An Ofgem investigation discovered that since 2021, Essex-based Farringdon Energy – trading as Champion Energy – lacked the proper billing systems needed to manage its customers’ accounts effectively and accurately record their energy consumption. This led to repeated cases where Farringdon routinely kept advance payments from customers as “Early Termination Fees” despite not having supplied any energy to these customers.
Farringdon also failed to issue energy bills based on actual meter readings, resulting in 159 customers – many of which were small independent businesses such as takeaways and convenience stores – being overcharged a total of £347,717.25. Following the investigation findings, Farringdon has refunded these customers with an additional £50 compensation payment for each affected customer.
Ofgem’s investigation found that Farringdon’s licence breaches stemmed from serious and sustained mismanagement during a period when responsibility for day-to-day oversight rested entirely with its director.
After Ofgem’s investigation concluded, Farringdon has agreed to pay £525,000 to Ofgem’s Voluntary Redress Fund – on top of the direct refunds and compensation already paid to affected customers. The company will also face enhanced regulatory oversight, independent audits and must implement sweeping reforms to its operational and governance structures.
Additionally, the director will step down from the board of Farringdon Energy Limited in recognition of his part in the mismanagement that caused these violations – and has pledged not to serve as a senior manager in the company moving forward.
Cathryn Scott, Ofgem director for market oversight and enforcement, said: “This unacceptable treatment of customers was a result of serious and sustained mismanagement where the only course of action was to remove the director responsible.
“Ofgem is satisfied that Farringdon has taken the necessary action to reimburse affected customers, significantly improve its processes and adhere to our requirements for enhanced regular monitoring by the regulator.”
Ofgem revealed that Farringdon had previously been found collecting payments it wasn’t entitled to for energy it wasn’t providing to its customers – this led to Ofgem imposing a penalty of £214,580 in June 2025, alongside £9,096 in compensation paid and £177,271 refunded to customers.
