Ovo Energy has agreed to pay more than £10 million after the energy regulator for Great Britain, Ofgem, found that inadequate monitoring of vulnerable customers with prepayment meters (PPMs) could have exposed them to a “clear risk of harm.”
Regulatory Findings
Ofgem’s investigation revealed that Ovo failed to adequately monitor its PPM customers, including those on the priority services register, breaching rules designed to protect vulnerable individuals. The regulator emphasized that the lack of oversight placed these customers at significant risk.
Settlement Package
In response, Ovo agreed to a settlement package comprising a £7 million payment to Ofgem’s voluntary redress fund and a £3.4 million package of credit and debt relief for some of its most vulnerable customers. Ofgem noted that this relief is in lieu of compensation. Affected customers will be contacted directly by Ovo and need not take any action.
Additionally, Ovo is in the process of paying £1.1 million to customers in the Scottish Highlands and islands after compliance work found that some rural customers lacked appropriate access to engineer support for more than two years, from 1 January 2022 to 1 April 2024.
Ovo’s Response and Improvements
During the investigation, Ovo took some corrective actions, including welfare visits to customers disconnected for over 72 hours who had not responded to communications. However, in some cases, customers who had run out of credit were not contacted. Ovo acknowledged that its historic processes fell short and expressed regret. The company stated that since 2024, it has significantly improved policies, systems, and training, implementing a new policy for identifying and supporting vulnerable customers.
Cathryn Scott, Ofgem’s director of market oversight and enforcement, 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. 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.”
An Ovo spokesperson added: “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.”
Recent Challenges for Ovo
This settlement follows a £2.7 million fine in January for failing to pass on government support payments for winter energy bills to thousands of vulnerable customers during the energy cost crisis. Moreover, the German energy group E.ON announced last month that it had agreed to acquire Ovo, a deal that would create Britain’s largest gas and electricity supplier by number of households served.
