Octopus Energy Fined £1.5M by Ofgem Over Billing Errors – What It Really Means
So, here’s what’s going on with Octopus Energy and this whole Ofgem situation – it’s caused quite a buzz. Ofgem, the UK’s energy regulator, has just wrapped up a two-year investigation into Octopus Energy and found that the company didn’t issue final bills to around 34,000 prepayment meter customers who either switched suppliers or ended their contracts between 2016 and October 2023.
Now, that might sound like a technical hiccup, but it’s actually pretty serious. Ofgem says it’s about customer protection – making sure people get refunded any credit left on their accounts. So, Octopus has agreed to pay out £1.25 million in compensation, plus another £231,000 in refunds for leftover credit. That’s an average of about £43 per customer. All in, this adds up to a £1.5 million payout.
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But here’s where it gets interesting. Octopus isn’t exactly apologising in the traditional sense. In fact, they’re pushing back on Ofgem’s rules. They argue that requiring a final bill for every prepay customer is nearly impossible to carry out. Why? Well, 60% of their prepay customers don’t tell them when they move out. And when they do move, most of them use up their balance or leave it behind for the next person. On top of that, only 10% of these customers have provided bank details, and about 70% of the refund cheques sent out never even get cashed. That’s a lot of money in limbo.
Octopus says they’ve actually been doing more good by charging their prepay customers around £70 less than the regulated price cap. They also claim their practices have saved vulnerable customers over £7 million – way more than what this Ofgem ruling is worth in refunds. According to them, it’s about practical solutions over rigid policies.
Rachel Fletcher from Octopus summed it up perfectly: they want Ofgem to focus less on bureaucracy and more on keeping people’s bills down. They’re arguing for a system that puts people first, not paperwork. Whether Ofgem sees it that way is a different story, but Octopus is clearly standing by its customer-first approach.
So yes, there’s a £1.5 million fine – but behind the headline is a much bigger conversation about how energy suppliers, regulators, and outdated systems need to catch up with the real lives and needs of customers.
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