Octopus Energy has issued nearly £1.5 million in refunds to customers due to a significant billing mistake. An inquiry by Ofgem revealed that over 34,000 prepayment meter customers did not receive their final bills within the mandated six-week period set by the energy regulator.
The affected Octopus customers, spanning from 2014 to October 2023, were compensated a total of £1.483 million. This amount includes £231,000 in refunds for remaining credit on closed accounts and an additional £1,250,000 in compensation for impacted customers, averaging £43 per customer.
Reimbursements have been disbursed directly to customer accounts or through sent cheques. All reachable customers are expected to receive their refunds or compensation by September. Unreachable customers will have their funds allocated to the Energy Industry Voluntary Redress Fund (EIVRS), which supports households in need.
Beth Martin, Ofgem’s director for consumer protection and competition, emphasized the importance of customers receiving final bills promptly to reclaim any remaining credit, especially for prepayment meter customers facing financial challenges. Ofgem commended Octopus for rectifying the error and ensuring customer satisfaction through refunds and compensation.
Octopus Energy also forgave debts owed by affected customers and updated its billing procedures post-investigation. The company disclosed that it charged prepay customers approximately £70 below the set price cap.
Rachel Fletcher, Octopus Energy’s Director of Economics and Regulation, highlighted the company’s commitment to prioritizing customer welfare and seeking innovative solutions within the energy industry. Fletcher urged Ofgem to prioritize reducing energy costs for consumers over regulatory policies to deliver tangible benefits to customers.
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