Ofgem found the big six supplier guilty of overcharging its customers in repeat instances in January 2013 and 2014.
Under Ofgem rules customers require 30 days’ notice of a price rise during which time they can signal their intention to leave without incurring exit fees. However, Eon wrongfully charged some of the customers who opted to switch as well as overcharged those who stayed.
Ofgem said that although 40,000 direct debit and standard credit customers were refunded the number of those actually affected is likely to be “significantly less” than this. However, the regulator added that Eon delayed informing the investigation of the thousands of pre-payment customers who were also affected by the overcharging.
Ofgem branded the repeat offense “absolutely unacceptable” and said that the penalty is higher to take this into account.
Eon has already repaid customers £400,000 and the £7.75 million additional payout will be made to Citizens Advice to be used to help vulnerable customers.
Ofgem senior partner in charge of enforcement Sarah Harrison warned that Eon’s actions undermine the government and regulator’s drive to boost customer engagement with the market by switching supplier.
“Eon’s errors meant customers who took the chance to switch were wrongly charged. It is important that Eon has repaid potentially affected customers and cooperated with the investigation. However it’s absolutely unacceptable that Eon failed to provide these vital customer protections yet again and this persistent failure is the reason for the high penalty,” Harrison said.