Eon Next will pay out £14.5 million in compensation to customers after “unacceptable” failures.

The power firm failed to provide final bills and refund credit balances to almost 250,000 pre-payment meter customers, the energy watchdog has said.

Ofgem said an error in Eon Next’s billing system between February 2021 and September last year meant that customers who transferred to another supplier or ended their contract did not receive final bills within six weeks, as required.

Many of these customers faced financial difficulty in a time of soaring energy prices, according to the regulator.

(Image: Jacob King/PA Wire)

Eon Next failed to give compensation payments of £30 or £60 to affected customers, while 100,000 customers were also not made aware of the remaining credit on their accounts – worth £51 on average – and did not receive automatic refunds.

Each customer affected is set to receive £144 on average after Eon agreed to pay out £14.5 million in compensation and redress.

The £14.5 million being paid out by Eon includes £4.7 million in credit refunds, £6.6 million in compensation payments and an extra £3.2 million in compensation to affected customers.

Eon, which self-reported the billing error, has also agreed to write off debt held by almost 150,000 pre-payment meter customers who closed their accounts during the time of the billing failures, Ofgem said.

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Beth Martin, director for consumer protection and competition at Ofgem, said: “Pre-payment meter customers are more likely to face financial difficulties, and during a period where households have been facing a significant cost-of-living crisis, it’s unacceptable that consumers did not receive refunds for credit that was owed to them, or final bills they are entitled to.

“Eon Next has demonstrated an understanding of the significant impact this issue may have had on its customers and it’s encouraging that they self-reported the issue and have worked with us to resolve it, and compensate affected customers to put things right.

“The action to write off debt will also offer affected households peace of mind.”

Where Eon was unable to trace affected customers, it has agreed to pay into the Energy Industry Voluntary Redress Fund, which funds projects and schemes to support vulnerable energy consumers.

It has also since updated its billing systems to resolve the issue and ensure final bills are sent to pre-payment meter customers, Ofgem said.