Ovo gets egg on its face by undercharging energy switchers

14 November 2014

energyYou know how it is when you recommend something to your friends and it turns out to be completely rubbish? Energy minister Ed Davey might be feeling a little red faced today after news emerges that his recommended smaller supplier Ovo has made a bit of a rickett and has charged a load of switchers the wrong energy rate.

It seems many of the people who actually could be bothered to go and find a new energy deal could find themselves having to fork out some extra cash as Ovo discovered their error which affects people who switched between April and June. In total, more than 13,000 customers of Ovo Energy were charged the wrong amounts for gas and electricity owing to a computer glitch. Three in four of these – just under 10,000 – will see the amount they owe increase as Ovo tries to correct the errors, with the worst cases seeing poor customers asked to cough up as much as £400 extra. Ovo said the average undercharge was £25.Similarly some households have paid hundreds of pounds too much and will be given refunds.

All this is obviously highly embarrassing for Ovo, which has positioned itself as a customer champion against the Big Six, and for ministers including Ed Davey who, earlier this year praised Ovo Energy for "doing a fantastic job" encouraging customers to switch to these small suppliers who he described as "agents of real change".

More than 300,000 people switch energy suppliers every month, figures show, with many starting to look to smaller firms such as Ovo and First Utility. Ovo is the third-largest of the small suppliers, behind First Utility and Utility Warehouse, according to data compiled by The Telegraph. While the small suppliers' share of the market has increased eightfold since 2011, they still only have around eight per cent, with the lion's share still held by the big six suppliers.

A spokesman for Ovo explained that some customers were originally set up on the wrong electricity and gas unit rates, hence the embarrassing correction needed now.

"We unreservedly apologise for this mistake and we’ve now started correcting the balance of accounts that have been affected as a matter of priority, and will be writing to every single customer affected," the spokesman said. “Anyone affected will be put back on the rates they initially chose. No saving any customer will have made by switching to us has been affected by this issue."

Still, Ovo are making some effort to placate the affected customers. Overcharged customers will be repaid "as quickly as possible", with undercharging below £10 written off. Customers undercharged by more than £50 will receive a goodwill gesture of between £20 to £100.

TOPICS:   Utilities

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