Major UK energy provider ordered to pay £150 compensation to thousands of customers
A UK energy firm will pay thousands of customers £150 in compensation after it failed to pass on a mandatory discount.
Utilita must pay a total of £277,000 back to billpayers after it did not make Warm Home Discount payments on time, the regulator Ofgem said.
The payments should have been made between 2023 and 2024, however, 4,000 customers did not receive them because of an 'internal error in processing payments'.
Utilita paid £30,000 in compensation to customers shortly after the error was first identified. However, it has agreed with Ofgem to pay a further £247,000 to affected customers.
Formed in 2003, Utilita has around 800,000 customers in the UK and it specialises in Pay As You Go (PAYG) smart energy meters. The firm started installing smart prepayment meters in 2008, with 90 per cent of its customers now using one.
The Warm Home Discount scheme is administered by Ofgem on behalf of the government and gives people on low incomes an automatic payment of £150 each year, which is applied by their supplier.
There are two ways to qualify. The first is for the bill payer to be in receipt of the Guarantee Element of Pension Credit. Otherwise, they must receive a qualifying benefit (which includes Universal Credit) alongside having 'high energy costs,' which is assessed by the government.
Ofgem's latest supplier performance report shines a light on Warm Home Discount non-compliance, revealing that seven other suppliers also failed to pass them on in 2023 and 2024.
The combined compensation payments from these companies was £484,960. This figure includes compensation for affected customers as well as payments to Ofgem's voluntary redress fund or to fuel poverty charities.
These were: Rebel Energy (£11,583.14), Good Energy (£3,394.34) Foxglove Energy (£28,805.93), Green Energy (UK) (£18,556.97), Tomato Energy (£40,183.38), Utility Warehouse (£380,928.33) and Tru Energy (£1,508.17).
Ofgem has confirmed that these payments have already been made.
Cathryn Scott, Regulatory Director of Market Oversight and Enforcement at Ofgem, said: 'The Warm Home Discount is a lifeline for vulnerable energy consumers on low incomes. Even a short delay in making these payments can cause harm to vulnerable customers, so it's vital that suppliers make these payments on time and without hassle.
'Unfortunately, on this occasion, Utilita fell short of our standards by failing to pay some of their customers in a timely manner. Utilita has conducted an audit of their Warm Home Discount processes to make sure this doesn't happen again.
'It's our duty to protect consumers. And today's outcome, as well as the findings set out in our Supplier Performance Report, serve as a reminder to all suppliers that failures to make scheme payments on time are unacceptable, and that we can and will take enforcement action to put things right for customers.'
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