Octopus Energy pays £1.5million for prepayment meter billing errors

PRESS NOTICE 

FOR IMMEDIATE RELEASE – Tuesday 8 July 2025 

Octopus Energy pays £1.5million for prepayment meter billing errors 

An investigation by the energy regulator, Ofgem, has found over 34,000 prepayment meter customer accounts with Octopus between 2014 and October 2023 did not receive final bills within six weeks, as required under Ofgem’s rules.  

In recognition of the impact these issues may have had on prepayment meter customers, many of whom may be vulnerable, Octopus agreed to pay a total of £1.483million in compensation and redress. The average sum paid per affected customer was £43. 

This includes refunds of £231,000 of credit that was remaining on accounts when they were closed, and a further £1,250,000 in compensation to affected customers.  

Although customers have sight of their balance on prepayment meters, it is right that a final bill is produced in order to give them a clear indication of their final debit or credit position. Ofgem also recognises that suppliers do not always benefit from credits left on a prepayment meter account as these funds may be used by the new owner or tenant. However, this money is nonetheless owed to the customer who has accrued the credit and should be returned. 

Beth Martin, director for consumer protection and competition at Ofgem, said:   

"It’s important that customers receive final bills in accordance with our rules, so they are aware of any credit remaining on their accounts and can reclaim it. This is particularly important for prepayment meter customers who are more likely to be in financial difficulty.  

“We are pleased that Octopus has now rectified the error and put things right with its customers, offering both refunds and compensation where it’s due. 

“We will continue to closely monitor compliance with our billing rules, and drive improvements in the sector so customers can expect the highest standards of service from their energy supplier.” 

The issue was identified after E.ON Next self-reported the same error to Ofgem. A detailed investigation followed, and Octopus has now updated its billing processes and systems ensuring PPM customers will receive final bills when their accounts are closed. 

  

ENDS 

Notes to Editors  

Any funds that remain unclaimed, such as where a customer cannot be contacted following multiple attempts, will be paid to the Energy Industry Voluntary Redress Fund (EIVRS) which funds projects and schemes to support energy consumers, particularly those in vulnerable situations. Octopus also voluntarily wrote off debt held by customers that closed their accounts during the period of non-compliance. 

The total sum paid also includes compensation payments to customers for breaching Guaranteed Standards of Performance (GSoPs).  

Octopus has attempted to contact all customers affected using details on file. Where this was not possible, Octopus instructed a third-party tracing agency to attempt contact. 

Where possible, payments have been made directly to customer accounts; where not possible cheques have been sent, with the expiry date of these cheques still to pass. It is expected that all contactable customers will receive refunds/compensation by September, at which stage any monies not claimed will be paid into the EIVRS.  

Ofgem has also highlighted the importance of suppliers being open and cooperative with the regulator, and self-reporting instances of non-compliance if issues are identified to ensure the impact on customers is minimised.   

It is important that suppliers understand their obligations under: 

• Standard Licence Condition 27.17, the requirement to take all reasonable steps to send a final Bill or statement of account of the Domestic Customer’s account within 6 weeks of the supplier transfer or termination of the Domestic Supply Contract. 

• Guaranteed Standards of Performance (GSoP) regulation 6CA (2020) and regulation 8 (2015), the requirement to make a standard (compensation) payment of £30 within 10 working days of the supplier’s failure to issue a customer a final bill within 6 weeks of the supplier no longer having responsibility for the supply of electricity or gas. If the supplier fails to make a standard payment on time it must make an additional standard payment of £30 within a further 10 working days. To note, An increased compensation payment level of £40 took effect from 2nd January 2025, however £30 was applicable during the period of non-compliance Supplier Guaranteed Standards of Performance (GSOP) Payment Uplift | Ofgem 
• Standard Licence Condition 5A, the requirement to be open and cooperative with Ofgem. The licensee must disclose any actions or omissions that give rise to a likelihood of detriment to Domestic Customers.