energy supplier E.ON has been penalised nearly £8 million after customers who wanted to switch supplier in the wake of price rises were incorrectly charged.
It is the second time the company has been rapped on the issue by regulator Ofgem after a similar error impacted 94,000 former customers prior to 2011.
Ofgem said the size of the penalty, which will be handed to Citizens Advice, reflected E.ON’s “repeated failing” on billing rules after it imposed fees and overcharged customers who sought to leave the firm in the wake of price rises in January 2013 and 2014.
The company has since paid back up to £12 to around 40,000 customers and is also working to refund as many as 6,500 pre-payment customers.
The regulator said E.ON’s errors meant customers who took the chance to switch suppliers after the bill rises were wrongly charged.
Sarah Harrison, Ofgem’s senior partner in charge of enforcement, said: “Ofgem’s rules give customers a chance to avoid exit fees and higher costs when suppliers put up prices.
“These are important customer protections and it is vital that suppliers play by the rules so customers are encouraged to engage in the market.”
Ms Harrison said: “It’s absolutely unacceptable that E.ON failed to provide these vital customer protections yet again and this persistent failure is the reason for the high penalty.”
It said in a statement E.ON said: “Although the underlying reasons are different, this is not the first time that E.ON has made this error and the company sincerely apologises to those affected.
“E.ON has agreed with Ofgem to carry out an independent external audit relating to the specific breaches and to implement any appropriate recommendations.”