Bournemouth-based renewable energy supplier iSupply will pay £1.5m to industry watchdog Ofgem for overcharging its customers.
The firm, which has supplied domestic customers since 2012, overcharged around 4,400 customers who were on price-cap protected default tariffs.
Between January and March 2019, iSupply overcharged customers £36,270 in total.
iSupply has since refunded customers it overcharged and has agreed to pay £1.5 million into Ofgem’s voluntary redress fund for its failings.
In January Ofgem’s price cap for default tariffs came into force, protecting 11m customers. Senior employees at iSupply were aware of the breach, but did not report it to the regulator.
Ofgem launched an investigation into iSupply after it was approached by a whistleblower. Its inquiry found that the supplier had insufficient governance in place to address such non-compliance.
The firm confirmed it had taken steps to improve its governance and would continue to invest in its processes.
Ofgem will not take formal enforcement action against iSupply due to the steps the company has already taken.
Anthony Pygram, director of conduct and enforcement at Ofgem, said: “If a licensee breaches the rules, it quickly needs to tell Ofgem and put things right for its consumers. However, iSupply has admitted it failed to do so in this instance.
“The action we have taken against iSupply sends a strong message that all suppliers must treat their customers fairly and quickly address known harm so that customers are protected, or face the consequences.”
In a statement, iSupply said it had repaid all overcharges in October and November, as well as a further £5 as a “goodwill gesture.”
The company said it had “fallen short”, and would “make sure the same or similar things can never happen again”:
“We’re grateful to Ofgem for the way they’ve engaged with us. We have learnt from this process and are now better placed to consistently service all our customers in the right way”, the statement ended.
Peter Earl, head of energy at comparethemarket.com, said: “The actions of iSupply do little to restore faith in an energy market plagued with problems, including an excess of supplier collapses and a price cap not fit for purpose.
“Whilst we applaud Ofgem for taking action against this supplier for misconduct, the issues of consumers being confused by the price cap and the complexity of their energy bill will rumble on in 2020.”
Gillian Guy, chief executive of Citizens Advice, welcomed the move: “We’re pleased to see that iSupply has not only refunded the customers it overcharged, but is also paying this voluntary amount into Ofgem’s redress fund.
“This is the second time in a year that iSupply has failed to charge customers correctly. It underlines why Ofgem’s proposed stricter regulations for new and existing suppliers should be put into effect as soon as possible.”