Ovo Energy is set to pay over £10 million following a thorough investigation by Ofgem, the energy regulator, into how the company supported its prepayment meter (PPM) customers between 2018 and 2024. This significant payment addresses a range of failings that exposed vulnerable households to a "clear risk of harm".
The energy giant has agreed to pay £7 million into Ofgem's Voluntary Redress Fund. Crucially for customers, an additional £3.4 million will be provided directly as a package of credit and debt relief for some of its most vulnerable households who were affected by these issues.
Ofgem's investigation highlighted several critical shortcomings. These included inadequate monitoring of PPM customers, particularly those registered on the Priority Services Register (PSR), which is designed to protect vulnerable individuals. The regulator found breaches of its rules, noting that key checks and safeguards were not consistently carried out.
Staff training materials were also identified as problematic, often being unclear, inconsistent, or containing conflicting guidance. This led to failures in how Ovo delivered its PSR obligations, meaning some customers were not properly identified or supported. Furthermore, support for customers who self-disconnected after running out of credit was inconsistent, with some receiving no communication or follow-up.
"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," said Cathryn Scott, Director of Market Oversight and Enforcement for Ofgem. "As a result of our investigation, vulnerable customers will receive debt write-off or credit payments alongside a payment into our voluntary redress fund."
An Ovo Energy spokesperson acknowledged the findings, stating, "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."
This isn't the first time Ovo has faced penalties for customer service issues. In January, the company was ordered to pay £2.77 million in compensation after nearly 12,000 vulnerable customers experienced lengthy delays in receiving their Warm Home Discount support. Separately, Ovo is also paying £1.1 million to customers in the Scottish Highlands and Islands due to a compliance issue where rural customers lacked appropriate access to engineer support from January 1, 2022, to April 1, 2024.
What this means for you
If you were an Ovo Energy prepayment meter customer between 2018 and 2024, particularly if you are considered vulnerable or are on the Priority Services Register, you may be eligible for a share of the £3.4 million in credit or debt relief. This could mean a direct credit to your account or a reduction in any outstanding debt you have with Ovo. The company is expected to identify and contact affected customers directly.
Are you affected? A scenario:
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Scenario: You are an Ovo Energy prepayment meter customer, you have a long-term illness, and you struggled to top up your meter between 2018 and 2024, leading to periods without energy. You may also be on the Priority Services Register.
What this means: Ovo's failings in monitoring and supporting vulnerable customers directly impacted people like you. You should be among those considered for the £3.4 million package of credit or debt relief. Keep an eye out for direct communication from Ovo.
What to do right now:
- Check Your Eligibility: If you believe you were affected by these issues, especially if you are a vulnerable customer on a prepayment meter, await contact from Ovo Energy. They are responsible for identifying and reaching out to eligible customers for the £3.4 million package.
- Verify Your Priority Services Register Status: If you have a long-term illness, disability, or are of pensionable age, ensure you are registered on the Priority Services Register (PSR) with your energy supplier. This ensures you receive extra support and protection.
- Contact Ovo Energy: If you haven't heard from Ovo and believe you should be considered for support, or if you have questions about your account, contact their customer service directly.
- Seek Independent Advice: If you are struggling with energy debt or have concerns about your prepayment meter, consider reaching out to independent energy advice services or debt charities for guidance and support.
The other side: Prepayment meters can be a positive choice
While this investigation highlights serious issues, it's important to remember that prepayment meters can be a positive choice for many customers. They offer a way to manage energy spending and avoid large unexpected bills. Ofgem notes that many PPM customers report high levels of satisfaction. The regulator is also working to address the "poverty premium" historically associated with PPMs, with plans to equalize summer price caps by spring 2026.
Sources
- Ofgem — Investigation findings and official statements
- Ovo Energy Spokesperson — Official statement
- The Guardian — Initial reporting and context