Octopus Energy Slams Regulator Over Impossible Customer Billing Rules

Octopus Energy has launched a scathing criticism of energy regulator Ofgem following a £1.5m fine over what it describes as “impossible” customer billing rules. The energy supplier, now Britain’s largest, took issue with the requirement to provide final bills within six weeks when customers vacate their properties.

The regulatory breach affected more than 34,000 Octopus prepayment metre accounts between 2016 and October 2023, with customers not receiving their final bills within the mandated timeframe. The £1.5m penalty will be directed towards customer compensation.

Rachel Fletcher, a director at Octopus, expressed frustration with the situation, stating that the company prioritises customer outcomes despite imperfect industry systems. The supplier particularly highlighted that 60% of prepayment customers fail to notify them when moving premises.

The energy provider maintains that most prepayment customers either deplete their remaining credit or leave it for subsequent tenants, with merely 2% reaching out regarding final bills. Octopus opted to charge prepayment customers approximately £70 below the price cap, resulting in £7m of customer savings.

Ofgem’s Beth Martin emphasised the importance of timely final billing, particularly for prepayment metre customers who often face financial challenges. The regulator confirmed that affected customers received an average refund of £43, with total compensation including £231,000 in remaining account credits and an additional £1.25m in compensation.

The dispute emerges as Octopus cements its position as an industry leader, having recently surpassed British Gas as Britain’s primary household energy supplier. The company’s growth accelerated during the energy crisis following Russia’s invasion of Ukraine, as it absorbed customers from collapsed competitors.