E.ON Next to pay £5m for ‘severe weaknesses’ in customer service

E.ON Next will pay £5million in compensation after more than 500,000 of the energy supplier’s customers were potentially impacted by poor customer service.

Energy regulator Ofgem found ‘severe weaknesses’ in the company’s offering during a market compliance review conducted between October and December 2022, including a substantial volume of unanswered calls and lengthy response times.

Approximately half of all calls to the supplier were dropped, while customers had to wait 18 minutes on average to speak to E.ON Next, the watchdog said.

Investigation: Energy regulator Ofgem discovered ‘severe weaknesses’ at E.ON Next, including a massive volume of unanswered calls and lengthy call response times

E.ON Next will spend £4million reimbursing its customers, who will receive £8 each, and hand another £1million to Ofgem’s Voluntary Redress Fund, which helps support Britons struggling to pay their bills.

In early February, Ofgem handed a provisional order to the Coventry-based company asking it to focus on upgrading customer service levels.

The regulator said the firm has subsequently cut call waiting times to under five minutes and reduced the dropped call rate to less than 10 per cent.

Cathryn Scott, director for enforcement and emerging issues at Ofgem, said E.ON Next’s penalty ‘shows Ofgem’s determination to stand up for the rights of consumers and drive up standards’.

She added: ‘The very least that a customer should expect of their supplier is for them to pick up the phone to them in a timely way.

‘As the energy regulator, our purpose is to protect energy consumers, and this action serves as a reminder to all suppliers that they must ensure that their customers are able to contact them quickly and easily when they need to. 

‘This is particularly important during this time of volatile energy prices when many households are struggling with their bills.’

Gas and electricity prices in the UK skyrocketed throughout late 2021 and the first half of last year due to loosening Covid-related restrictions and Russia’s invasion of Ukraine.

Prices were further accelerated by the country’s low gas storage capacity, weaker-than-expected wind and solar power generation in 2021, and rising gas demand in Asia and South America.

Ofgem’s probe into E.ON Next forms part of a more comprehensive look into customer service across 17 British energy suppliers, all of whom have been told to make improvements. 

It uncovered ‘moderate weaknesses’ at 11 suppliers, including British Gas, EDF, Good Energy, and Scottish Power, and ‘minor weaknesses’ at five others, such as Ecotricity, Shell and Octopus.

Among the problems discovered by the regulator were inconsistent scripts for staff handling complex calls, a high rate of customer complaints upheld by the Energy Ombudsman, and insufficient management information to track performance.