Ovo Energy has reached a settlement with Ofgem, the energy regulator for Great Britain, over failings in how the company monitored customers using prepayment meters. The investigation determined that Ovo did not sufficiently oversee its prepayment meter customer base, particularly those registered on the priority services register for vulnerable consumers, resulting in violations of regulatory protections.
Under the settlement agreement, Ovo will make a £7m payment to Ofgem’s voluntary redress fund and provide a £3.4m package consisting of credit and debt relief directed toward its most vulnerable customers, which Ofgem designated as compensation in lieu of additional penalties. Affected customers will be contacted by Ovo regarding these payments and are not required to take any action to receive benefits.
Separately, Ovo is paying £1.1m to customers in the Scottish Highlands and islands. Regulatory compliance work identified that certain rural customers lacked adequate access to engineer support for an extended period spanning from 1 January 2022 to 1 April 2024. During the investigation, Ovo implemented some supportive measures for vulnerable customers, including welfare visits to those disconnected for more than 72 hours without communication response, though some customers who exhausted their credit balance were not contacted by the company.
Ovo acknowledged that its historical processes fell below expected standards and stated that since 2024 it has undertaken significant improvements to its systems, policies, training, and implementation procedures, including a new framework for identifying and supporting vulnerable customers. Cathryn Scott, Ofgem’s director of market oversight and enforcement, noted that while prepayment meters serve many customers effectively, robust monitoring is essential to protect vulnerable consumers.
This settlement represents another recent regulatory action against Ovo, which faced a £2.7m fine in January for failing to distribute government winter energy bill support payments to vulnerable customers during the energy cost crisis. The company is also undergoing acquisition by German energy group E.ON in a transaction intended to create Britain’s largest gas and electricity supplier by household count.