Good Energy Limited to pay £2,000,000 for overcharging customers

Decision
Publication date
Company
Good Energy Limited
Industry sector
Supply and Retail Market

Good Energy Limited is to refund and compensate 6,966 customers it has overcharged, primarily with reference to the price cap and Energy Price Guarantee. The total amount of customer detriment to be refunded is £391,650. Refunds will be issued automatically to affected customers.

In addition, the supplier will pay £1,250,000 to Ofgem’s voluntary redress fund and £368,404 in goodwill payments to affected customers, equating to a total payment of £2,010,054.

In October 2022, Good Energy Limited discovered that the absence of an operational process to adjust the tariff after a customer changes their payment method resulted in an overcharge to 6,966 customers for varying periods of time between January 2019 and January 2023. Good Energy Limited failed to transfer customers from a non-direct debit tariff to a direct debit tariff after the customer had updated their payment method, causing affected customers to be charged above the maximum rates allowed under the price cap and Energy Price Guarantee. The average amount being refunded to affected customers is £56.

Ofgem found that Good Energy Limited had inadequate systems, processes and governance in place to prevent customer overcharging when customers change their payment method, over an extended period. Good Energy Limited also admitted to failing to comply with Standard Licence Condition 5 “SLC 5”, which sets out the requirement on licensees to provide information when and in the form requested by Ofgem in order to conduct its regulatory duties. Good Energy Limited repeatedly failed to provide accurate submissions for the mandatory Tariff and Customer Account Request for Information (RFI) in each price cap period, which is issued to all domestic suppliers. 

Good Energy Limited has provided a formal improvement plan, as requested by Ofgem, to ensure appropriate governance and processes are put in place to prevent similar overcharge and RFI reporting issues from reoccurring.

Suppliers must be vigilant and ensure that all eligible customers, particularly those who may be in vulnerable circumstances, are protected by the price cap and Energy Price Guarantee. Where issues are identified, Ofgem expects suppliers to act quickly to resolve any overcharge and to engage with the regulator on the steps they are taking to put things right. In determining this redress package, we have considered the additional financial hardship that this issue may have placed on customers, in addition to the magnitude and duration of the overcharge. We have also considered the persistent reporting issues to Ofgem which prevented this issue from being identified and rectified sooner.

Ofgem has decided not to take formal enforcement action after considering Good Energy Limited self-reported the issue, the steps put in place to address its failings and the redress it has agreed to pay. Had Good Energy Limited not self-reported the issue - the redress package sought would have been considerably higher.

Ofgem closely monitors all suppliers’ approaches to the implementation of the price cap and Energy Price Guarantee and will continue to hold suppliers to account if they do not meet their obligations. Ofgem also considers non-compliance with SLC 5 (and other reporting requirements) to be a serious matter and we are prepared to take escalated action where appropriate.

Notes to editors:

  • Good Energy Limited supplies over 250,000 customers.
  • In addition to customers covered by the price cap, this overcharge issue also affected a number of customers on tariffs not covered by the price cap (as they are on a renewable Standard Variable Tariff that benefits from an enduring derogation from complying with the price cap). This overcharge relates to affected customers paying in excess of their contractual rates. Details of Good Energy Limited Standard Variable Tariffs that hold an enduring derogation from the price cap can be found here: Decision to issue Good Energy Limited and Good Energy Gas Limited an enduring derogation for renewable Standard Variable Tariffs from the Default Tariff Cap.
  • Ofgem’s Redress Fund is operated on its behalf by the Energy Saving Trust and allows companies to pay a sum of money to appropriate charities, trusts, organisations or consumers as a result of breaches of licence conditions. Information on the Energy Saving Trust can be found here: Funded Energy Redress Projects.