Ovo Energy has been slapped with an £8.9mln fine for overcharging just weeks after it acquired 3.5mln new customers through the acquisition of SSE PLC’s (LON:SSE) retail arm.
Inaccurate statements were sent to around 500,000 customers between July 2015 and February 2018 according to regulator Ofgem, while consumption figures in one winter were also miscalculated.
Thousands of pre-pay meter customers were also not notified when tariffs were ending, resulting in them overpaying.
Ofgem added that Ovo was aware of its problems but failed to report them in the majority of cases.
Anthony Pygram, director of conduct and enforcement at Ofgem, said: “Ovo Energy billed a number of its customers incorrectly and issued them with inaccurate information.
“The supplier did not prioritise putting these issues right whilst its business was expanding.”
Ovo Energy is one of the fastest-growing of the so-called challenger suppliers that are threatening the traditional dominance of the giants in the UK’s energy market.
Earlier this month, the group paid £500mln for SSE’s retail business in a move that took its customers base to 5mln and saw 8,000 staff migrate across.
In a statement, Ovo admitted to had made errors and had repaid customers who were overcharged.
“Ovo holds itself to high standards, but we have not always got it right.
“We accept Ofgem’s findings of issues regarding estimation processes, information formatting and pricing errors.”
The £8.9mln will paid into a voluntary redress fund to help vulnerable customers.
Another supplier, Utility Warehouse also agreed to pay back £650,000 in compensation and redress after it overcharged thousands of its customers.