E.On will pay more than £650,000 in compensation after the energy giant took payments from customers earlier than agreed, leaving some people facing financial difficulties over Christmas.
Energy regulator Ofgem said the firm took money from 1.6 million customers on 24 December instead of in January.
Consequently, customers may have experienced “difficulty making payments in the run up to Christmas”.
Ofgem said E.On reported the problem on the day it occurred.
It added that the company had continued to engage with Ofgem in January and February this year.
E.On has paid more than £55,000 to customers who said they had “suffered additional bank charges, out of pocket expenses or other detriment, as a result of the direct debits being taken early”.
The company has also agreed to pay £627,312 to Ofgem’s energy redress fund which, as well as being available for customers who have been affected by this issue, also supports “energy consumers in vulnerable situations”.
The payments were taken early after E.On had made changes to “friendly credit hours for pre-payment customers between Christmas and New Year”.
The regulator said: “Ofgem considers that E.On failed to conduct the appropriate checks to ensure that this would not lead to any unintended consequences for customers.”
The BBC reported on Christmas Eve that customers faced being overdrawn with their banks over the festive period because of the early payment.
@EONhelp when is someone actually going to answer me on live chat you are quick enough to to clear my bank account on Christmas Eve with your IT error but can’t be bothered to help
— Vicki Stafford (@whammergirl) December 24, 2020
Many also experienced problems getting through to E.On for an explanation.
Anna Rossington, Ofgem’s director of retail, said: “Ofgem expects suppliers to adhere to the terms of contracts they have with customers, in particular the agreed direct debit payment dates.
“This failure is a reminder to suppliers that when making changes to their systems, they need to undertake appropriate checks to avoid any unintended consequences for customers.”
The energy company said it would continue to make redress and goodwill payments to customers who make legitimate claims in relation to this issue.
Ms Rossington said: “Customers who have been negatively affected and haven’t already spoken to E.On about it, should contact E.On if they wish to make a claim for any bank charges or other detriment caused by the early direct debit payments.”