Ovo to cough up £11.4m for exposing vulnerable customers to harm

Energy supplier Ovo is set to cough up a hefty sum after an investigation by the watchdog concluded that it had left vulnerable customers at risk of harm.

The firm – which focuses on smart technology, green energy tariffs, and carbon-reduction goals – will pay £7m into Ofgem’s voluntary redress fund, which is used for firms that breach regulatory rules pay money into a central fund instead of, or in addition to, standard fines.

On top of this, Ovo will provide a £3.4m package of credit and debt relief for some of its most vulnerable customers in lieu of compensation.

It comes as the company is already in the process of paying £1.1m to customers in the Scottish Highlands and Islands after compliance engagement unveiled some rural customers did not have appropriate access to engineer support between 2022 and 2024.

Cathryn Scott, director of market oversight and enforcement for Ofgem, said: “It is clear that OVO fell short in its support of vulnerable pre-payment meter customers, and it’s right that they’ve taken action to improve their processes.”

Ovo’s oversights left some ‘customers exposed to harm’

Pre-payment meters (PPM) act as a pay-as-you-go system for utilities where, instead of paying for energy in a monthly bill, customers can pay in advance by loading credit onto a smart card, key, or through a smartphone app.

“Prepayment meters are a positive choice for many customers, helping them stay in control of their energy use and reporting high levels of satisfaction – but it’s not suitable for everyone and strong monitoring must be in place to protect vulnerable consumers,” Scott said.

The investigation concerned Ovo’s treatment of existing PPM customers. It found the firm failed consistently to monitor and accurately record customers interactions, with evidence and key checks not always carried out.

Ofgem said these oversights “risked missing signs of vulnerability, leaving some customers exposed to harm”.

It also identified issues with staff training materials, which it said were at times “unclear, inconsistent, and contained conflicting guidance”.

A separate Market Compliance Review (MCR) that assessed conduct across the energy sector in relation to PPM installations across the period 2022-23 led to some £73.6m being paid in compensation by eight suppliers including Ovo.