Britain’s largest residential gas and electricity supplier is set to pay £1.5m in refunds and compensation after failing to provide customers with final bills within six weeks, Ofgem has said.
Octopus Energy has agreed to pay an average of £43 per affected customer in compensation and redress, to a total of £1.48m.
It comes after regulator Ofgem found more than 34,000 prepayment meter customers between 2014 and October 2023 did not receive their final bills within the necessary timeframe.
The sum being paid by Octopus Energy includes refunds of £231,000 of credit that was remaining on accounts when they were closed, and a further £1.25m in compensation to affected customers.
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Octopus Energy now has 7.5 million retail customers in Britain, following its 2022 rescue of the collapsed energy supplier Bulb, and the subsequent acquisition of Shell’s home energy business.
In January, it announced that it had become the country’s biggest supplier – surpassing Centrica-owned British Gas – with a 24% market share.
It also has a further 2.5 million customers outside the UK.
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Beth Martin, director for consumer protection and competition at Ofgem, said: “It’s important that customers receive final bills in accordance with our rules, so they are aware of any credit remaining on their accounts and can reclaim it.
“This is particularly important for prepayment meter customers who are more likely to be in financial difficulty.
“We are pleased that Octopus has now rectified the error and put things right with its customers, offering both refunds and compensation where it’s due.”
Ofgem said the issue was identified after E.ON Next self-reported the same error to the regulator.
Octopus said Ofgem had spent “two years investigating an alleged issue with prepayment meter bills that had zero customer complaints and had already channelled millions of pounds into customers’ hands”.
It said that while Ofgem’s ruling that prepayment customers must receive a final bill upon moving out was “sensible in principle”, it was impossible to implement in most cases.
