Octopus and Utility Warehouse: suppliers to pay £7m after Ofgem price cap breach
Octopus Energy and Utility Warehouse are among ten UK energy suppliers ordered to refund and compensate over 34,000 customers after an Ofgem investigation uncovered systemic overcharging linked to technical billing errors.
The total payout of 7m – comprising £5.6m in direct refunds and nearly £1.4m in goodwill payments – follows a compliance review by the energy regulator into pricing practices related to ‘restricted meter infrastructure’.
This issue, which spanned from January 2019 to September 2024, affected homes with mutliple electricity meter points used to measure different types of usage, such as night-time tariffs.
While suppliers are permitted to apply multiple standing charges in such cases, Ofgem found that this led to some customers being billed above the government’s energy price cap – a clear breach of regulatory limits designed to protect consumers from excessive charges.
Charlotte Friel, Ofgem’s director of retail pricing and systems, said: “Our duty is to protect energy consumers, and we set the price cap so customers don’t pay more than they should. While it’s clear that errors were made, we welcome the swift resolution and refunds”.
She added that the case “serves as a reminder” that suppliers must apply the price cap properly and have robust billing processes in place.
Ofgem will continue to monitor suppliers and engage to ensure the payouts are delivered in full.
All ten suppliers involved have now updated their systems to prevent repeat errors. Although the regulator did not publish the full list of suppliers, both Octopus Energy and Utility Warehouse have confirmed their participation.
The price cap, first introduced in 2018, limits how much suppliers can charge customers on default tariffs for each unit of gas and electricity, as well as standing charges.
The incident also comes amid growing regulatory scrutiny of supplier billing practices, with Ofgem under pressure to enforce tighter controls following a series of billing and switching issues across the industry in recent years.