Domestic energy supplier E.ON Next Energy Limited is to pay £5 million in compensation for poor standards of customer service, uncovered by an Ofgem review of the market.

Throughout 2022, energy regulator Ofgem conducted a series of Market Compliance Reviews (MCRs), examining energy suppliers’ performance on key areas across the sector in a bid to drive up standards.

One of these ‘deep dive’ reviews was focussed on customer service and complaints, and found severe weaknesses at E.ON Next, notably in relation to excessive call waiting times and high abandoned call rates.

The review found that during the period October 2022 to December 2022, E.ON Next’s customer contact provision struggled to cope with demand – meaning that many customers were unable to speak to E.ON Next or were forced to wait on hold for 18 minutes on average. The data also showed an unacceptable call drop-off rate with 50 percent of customer calls failing to successfully contact the supplier.

Over 500,000 customers were potentially affected.

Ofgem issued an order requiring immediate improvements to the call response rate, E.ON Next had already started addressing the issues and worked constructively with the regulator to quickly deliver improvements. As a result, call waiting times reduced to an average of less than five minutes and the dropped call rate fell below 10 percent.

E.ON Next has agreed to pay £5m in redress as follows:

  • E.ON Next will automatically compensate those customers most directly affected. Customers will receive £8 each, totalling £4 million. Customers do not need to do anything to receive this payment – it will be paid to them automatically.
  • An additional £1 million will be paid into Ofgem’s Voluntary Redress Fund, which supports energy consumers in vulnerable situations, and other innovation and carbon emission reducing investments.

Cathryn Scott, Director for Enforcement and Emerging Issues at Ofgem, said: “This shows Ofgem’s determination to stand up for the rights of consumers and drive up standards.

“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. The levels of service that we discovered at E.ON Next during the period of review were unacceptable.

“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.”

Ofgem has continued to monitor E.ON Next to ensure the necessary changes to their processes required by the Provisional Order have been implemented and are sustained.

More details about the successful progress made as a result of Ofgem’s Market Compliance Reviews can be found here.