Eon Next has been ordered to pay millions of pounds to thousands of customers due to customer service failings.
In total, the retailer is to pay out £5 million, after Ofgem found “severe weaknesses” in its customer service processes.
Around 500,000 customers will share £4 million, receiving £8 each in compensation. Eon will additionally pay £1 million into Ofgem’s Voluntary Redress Fund.
During one of its recent market compliance reviews, which examined the period October to December 2022, the energy regulator found Eon to have excessive call waiting times and high abandoned call rates.
Specifically, the review found that Eon struggled to cope with customer demand which meant that many customers were unable to speak to the company or were forced to wait on hold for 18 minutes on average.
Ofgem added that the data additionally showed an “unacceptable call drop-off rate”, with 50% of customer calls failing to successfully contact the supplier.
The regulator said Eon had already started addressing the issues and “worked constructively” with Ofgem prior to being issued with a provisional order requiring immediate improvements to the call response rate.
An Eon spokesperson said: “We had invested in improving our services even before Ofgem began its review, prioritising our most vulnerable customers with specialist teams and recruiting hundreds more energy specialists to be there for customers when they need us.
“We won’t shy away from the fact that we weren’t at our best but we’re heartened Ofgem recognises our efforts and our success in improving service levels even before this review began. We hit our agreed targets with Ofgem on day one and we’ve stayed there ever since.”
Cathryn Scott, Ofgem’s director for enforcement and emerging issues, said: “This shows Ofgem’s determination to stand up for the rights of consumers and drive up standards.
“The very least that a customer should expect of their supplier is for them to pick up the phone to them in a timely way. The levels of service that we discovered at Eon Next during the period of review were unacceptable.
“As the energy regulator, our purpose is to protect energy consumers and this action serves as a reminder to all suppliers that they must ensure that their customers are able to contact them quickly and easily when they need to. This is particularly important during this time of volatile energy prices when many households are struggling with their bills.”