- OVO Energy has agreed to a £10.4 million settlement with Ofgem.
- Review found process failures affecting some prepayment meter customers between 2018 and 2024.
- Supplier will also pay £1.1 million to households in Scotland's Highlands and Islands.
OVO Energy has agreed to pay £10.4 million following an Ofgem investigation into its treatment of prepayment meter customers, adding to growing regulatory scrutiny of how energy suppliers support vulnerable households.
The OVO Energy settlement and Ofgem prepayment meter investigation centre on failures identified between 2018 and 2024, which the regulator said could have left some customers at risk. The agreement includes a £7 million payment to a voluntary redress fund and a further £3.4 million in debt relief and account credits for affected customers.
Ofgem said the package would be delivered instead of formal financial penalties and compensation orders.
Under pressure over customer support
The regulator's investigation focused on OVO's processes for supporting customers using prepayment meters, which require households to pay for energy before they use it. Consumer groups and regulators have paid increasing attention to such customers in recent years, particularly during the cost-of-living crisis, amid concerns that vulnerable households can be left without access to gas or electricity if they cannot top up their accounts.
Cathryn Scott, Ofgem's director of market oversight and enforcement, reportedly said it was clear OVO had fallen short in its support for vulnerable prepayment meter customers. She added that it was appropriate for the company to take steps to improve its systems and processes, as quoted in a news report.
OVO apologised for what it described as shortcomings in some of its historical processes.
A company spokesperson reportedly said customer safety and support remained a priority and that the supplier had strengthened its policies and systems since the issues were identified.
Wider scrutiny of the energy sector
The settlement comes alongside a separate review of services provided to customers in Scotland's Highlands and Islands. That investigation found some rural households may not have had adequate access to engineer support between January 2022 and April 2024.
As a result, OVO has agreed to pay around £1.1 million to affected customers in the region.
The latest action forms part of a broader effort by Ofgem to tighten oversight of energy suppliers following concerns about the treatment of vulnerable customers. Earlier, British Gas agreed to provide £20 million in redress after an investigation into the installation of prepayment meters in some homes without consent.
The developments also come at a significant moment for OVO. The supplier is in the process of being acquired by German energy group E.ON, a deal that would create one of the largest energy providers in the UK.
For regulators, however, the focus remains on whether suppliers are meeting their obligations to customers who may be most at risk when energy support systems fail.
