Energy provider hit with £2.37m penalty over customer complaint failures

Over a thousand customers of a major energy provider are to receive compensation after it was hit with a £2.37 million penalty by the industry watchdog over complaint handling failures, PA have reported.

According to Ofgem, the energy sector regulator, 1,395 Ovo customers were affected by lengthy delays in seeing their complaints addressed – in some cases up to 18 months.

It said there were also delays in Ovo actioning the Energy Ombudsman’s decision, when complaints eventually were processed.

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Jacqui Gehrmann, deputy director of retail compliance at Ofgem, said: “Ovo failed to adequately protect and respond to their customers when it was needed most. This is not acceptable.

“Consumers deserve a clear and timely response when they make a complaint, and that’s why we stepped in quickly when we identified that Ovo’s performance was falling below acceptable standards.”

Ofgem first contacted Ovo in June last year after receiving reports of concerns over the time taken to address complaints referred by Citizens Advice Scotland, as well as to action decisions from the Energy Ombudsman.

Ovo says it has since boosted its complaint handling operation, making sure senior staff have oversight of complaints.

It is the UK's fourth largest energy supplier, with over 4 million customers across England, Wales and Scotland.

The Energy Ombudsman said: “Our role is to resolve disputes between consumers and energy suppliers, providing independent and impartial decisions that ensure fair outcomes.

“These decisions are legally binding and suppliers are required to implement them within 28 days.

“While the majority of resolutions are carried out on time, there are instances where consumers face unacceptable delays.

“It is reassuring to see that this investigation is now concluded, and that Ovo has reviewed and improved its systems and procedures.”

An Ovo spokeswoman said: “We recognise that a particular group of our customers in 2023 waited longer than we’d like for a resolution and were overdue a response from us, so we’ve sent them a letter of apology and compensation to help.”

Customers entitled to the compensation will be contacted directly by Ovo, the regulator confirmed.