Eon ordered to pay back thousands in refunds to 1.6m customers

Eon has been forced to pay hundreds of thousands of pounds into a redress fund after taking payments early from 1.6million customers on Christmas Eve, causing panic for many over the festive period.

The majority of the affected payments were due to be taken in January 2021, but Eon wrongly took payments on 24 December 2020.

This meant customers may have experienced out of pocket expenses, unexpected overdraft bank charges, difficulty making payments in the run up to Christmas and other unforeseen circumstances.

The industry watchdog, Ofgem, said the energy firm has made goodwill payments of £55,039 so far to compensate customers affected by additional bank charges.

Eon must pay £627,312 into an energy redress fund after taking payments early from 1.6million customers

It is also paying £627,312 to the energy redress fund which provides money to charities to deliver energy related projects that support consumers in vulnerable situations.

The affected payments were taken due to a technical fault, following changes Eon made to friendly credit hours for pre-payment customers between Christmas and New Year.

Ofgem said Eon failed to conduct the appropriate checks to ensure this would not lead to any unintended consequences for customers.

Michael Lewis, Eon UK chief executive, said: ‘This error should not have happened and it was unfortunate that it was so close to Christmas. 

‘We apologised to those affected at the time and I apologise to them again now. As soon as we noticed the issue, we took immediate steps to put things right for our customers.’

The energy provider reported the issue to Ofgem itself on 24 December and continued to engage throughout January and February 2021.

It made redress and goodwill payments totalling £55,039 to customers who contacted the supplier to say they had suffered additional bank charges, out of pocket expenses or other detriment, as a result of the Direct Debits being taken early.

Eon has also committed to continue to make these payments for customers with similar issues who come forward now.

It will also pay £627,312 in recognition of its failure to address underlying system and governance weaknesses, which would have prevented the error from occurring, to the energy redress fund.

Over a million customers had money taken from their Direct Debit early last Christmas by Eon

Ofgem agreed to close engagement following commitments from Eon to address the causes of the issue and compensate any customers that suffered detriment.

Anna Rossington, director of retail at Ofgem, said: ‘Ofgem expects suppliers to adhere to the terms of contracts they have with customers, in particular the agreed Direct Debit payment dates.

‘This failure is a reminder to suppliers that when making changes to their systems, they need to undertake appropriate checks to avoid any unintended consequences for customers.

‘Ofgem is always prepared to work with suppliers who have failed to comply with their obligations, but who have self-reported and are determined to put things right, as Eon has done.’

Customers who have been negatively affected and haven’t already spoken to Eon, should contact the provider if they wish to make a claim for any bank charges or other detriment caused by the early direct debit payments.

Will Owen, energy expert at Uswitch, said: ‘What looks like the fallout from a technical issue had the unfortunate timing of happening on Christmas Eve – the worst possible time to leave families struggling with out-of-pocket payments and unforeseen bank charges.

‘It’s somewhat reassuring that Eon noticed the issue themselves and acted quickly to offer goodwill payments to customers who spotted the error to cover any extra expenses they suffered.

‘There are likely to be many more customers affected by this error who have yet to get in touch with Eon for compensation.

‘If you are an Eon customer, check your bills to see if you were charged early and contact the supplier if you do not hear from them about a goodwill payment.

‘It’s important to always keep an eye on anything coming out of your bank account and if you spot something unusual, contact your provider straight away.’