OVO Energy has agreed to pay about £10.4m ($14m) in settlements after an investigation found failures in its processes that could have put prepayment meter customers at risk.
Energy regulator Ofgem said it had closed its investigation into the supplier for its process failures that could have put vulnerable prepayment meter (PPM) customers at risk.
The regulator’s investigation concluded that OVO’s inadequate monitoring of PPM customers, including those on the Priority Services Register (PSR), led to breaches of Ofgem’s rules designed to protect customers in vulnerable situations.
It said this “exposed consumers to a clear risk of harm”.
In recognition of Ofgem’s findings, Ovo, founded by entrepreneur Stephen Fitzpatrick, has agreed to a settlement package.
This includes a £7m payment to Ofgem’s Voluntary Redress Fund and providing a £3.4m package of credit and debt relief for some of its most vulnerable customers, in lieu of compensation.
Ofgem said customers who are due payments will be contacted by OVO Energy and do not need to take any action.
OVO is also in the process of paying £1.1m to customers in the Scottish Highlands and Islands following compliance engagement. This identified that some rural customers did not have appropriate access to engineer support during the period from 1st January 2022 and 1st April 2024.
OVO, during the investigation, undertook remedial actions to support vulnerable customers, including welfare visits for customers who had disconnected for more than 72 hours, and not responded to any communication during that peri
Cathryn Scott, director of Market Oversight and Enforcement for Ofgem, said: “It is clear that OVO fell short in its support of vulnerable PPM customers, and it’s right that they’ve taken action to improve their processes. As a result of our investigation, vulnerable customers will receive debt write-off or credit payments alongside a payment into our voluntary redress fund.
“Prepayment meters are a positive choice for many customers, helping them stay in control of their energy use and reporting high levels of satisfaction – but it’s not suitable for everyone and strong monitoring must be in place to protect vulnerable consumers.
“This investigation forms part of Ofgem’s wider work to raise standards across the energy market and strengthen consumer protections, challenging suppliers to do more to identify and support customers in difficulty.
“Anyone worried about paying their bill should contact their supplier as early as possible to access the support available and discuss the options that suit their circumstances.”
An OVO spokesperson said: “Ofgem’s investigation examined how we supported prepayment meter customers between 2018 and 2024. We accept that some of our historic processes fell short of expected standards, and we are sorry for that.
“Keeping our customers safe and supported is hugely important to us and we recognise there were areas where we needed to do better.
“We have since worked to strengthen our policies and systems, including a new Safe and Reasonably Practicable (SARP) policy, strengthening how we identify and support our vulnerable customers. This settlement reflects both those historic issues and the improvements we have made.”
The company said that customers who may be eligible for a goodwill payment will be contacted directly by OVO, adding they do not need to take any action in response to this announcement.
