More than a million bill payers will get refunds totalling £10.4million after 18 energy firms were found to have overcharged customers who switched to better deals.
Energy regulator Ofgem said suppliers including the Big Six firms such as British Gas, npower and EDF overcharged customers £7.2 million over seven years after failing to follow price protection rules.
Ovo Energy has the largest compensation sum to payout, totally £2,801,231.51.
Some of the other largest payouts come from British Gas, Scottish Power and Shell, all of which are set to issue more than £1million in compensation.
The regulator found 18 suppliers did not adhere to price protection rules, which protect a customer’s tariff price when they decide to either switch suppliers or tariffs after a price increase.
Energy companies are having to payout as much as £2.8million in compensation after overcharging customers after they switched to another account. Shell, Ovo Energy, British Gas and Scottish Power are among 18 firms that will pay out a total of £10.4million
Several suppliers self-reported the issue to Ofgem, which prompted it to ask all firms to assess their practices, revealing failures among 18 suppliers between 2013 and 2020.
The firms have agreed to refund all those affected and, in some cases, make additional good will payments to the tune of £10.4million in total, Ofgem said.
Ofgem said today that the average payout to customers is around £6, but this will vary depending on the company involved.
Scottish Power has apologised for the charge and confirmed it was refunding customers an average of £9.
Anna Rossington, interim director of retail at Ofgem, said: 'Customers should have confidence in switching and not be overcharged when doing so.
'This case sends a strong message to all suppliers that Ofgem will intervene where customers are overcharged and ensure that no supplier benefits from non-compliance.'
Customers affected include those on standard variable and fixed term deals who switched to different suppliers, as well as those on fixed term deals who switched to another deal with the same supplier.
HOW MUCH IS EACH ENERGY COMPANY PAYING OUT?
Bristol Energy - 12,617 customers affected. Total Payout: £56,552.64
British Gas/ Centrica - 141,415 customers affected. Total Payout: £1,269,095.47
E (Gas and Electricity) - 20,870 customers affected. Total Payout: £72,772.93
E.On - 28,126 customers affected. Total Payout: 238,884.29
EDF - 79,083 customers affected. Total Payout: £516,191.55
Engie - 9,061 customers affected. Total Payout: £21,218.74
ESB Energy - 1,961 customers affected. Total Payout: £49,787
Green Star Energy - 79,083 customers affected. Total Payout: £808,351
npower - 2,030 customers affected. Total Payout: £25,602.69
Octopus Energy - 19,712 customers affected. Total Payout: £121,444.52
Orbit - 723 customers affected. Total Payout: £7,081.12
OVO Energy - 240,563 customers affected. Total Payout: £2,801,231.51
PFP Energy - 5,347 customers affected. Total Payout: £50,929.31
Scottish Power - 157,236 customers affected. Total Payout: £1,967,465.28
Shell - 225,823 customers affected. Total Payout: £1,217,203.40
So Energy - 10,514 customers affected. Total Payout: £78,480.89
SSE - 132,620 customers affected. Total Payout: £983,334.45
Utility Warehouse - 2,723 customers affected. Total Payout: £95,512.15
The regulator said most of the failures were due to suppliers not having proper plans in place to make sure the protections were applied in full when customers decided to switch.
Ofgem said it was not taking formal action against the suppliers, given their co-operation and agreement to compensate.
But it warned firms could face formal action if they do not follow the price protection switching rules going forward.
An OVO spokesperson: 'We are very disappointed to have fallen short of our regulatory responsibilities.
'We have apologised and returned money to our members and worked with the regulator to identify and fix the historical issues.
'Ofgem has recognised the steps we have taken to refund and contact all members due compensation as well as ensure that we are compliant going forward.
'We have also made an additional voluntary contribution to the redress fund to help support customers in vulnerable situations.'
A ScottishPower spokesperson said: 'We regret that some of our customers did not have their price protected during a switch or move as they should have done and we would like to apologise to any former or current customers of ScottishPower affected by this, all of whom have now been refunded.
'Our affected customers were overcharged by an average of £9.22 and we have now returned any overcharge to those customers and have also provided over half a million pounds of goodwill, the majority of which has been paid to Ofgem's Voluntary Redress Fund which helps support energy consumers in vulnerable situations.
'It is clear that there have been some issues implementing this process across the industry, with just under half of energy suppliers failing to fully protect customers' prices during a switch or move.
'We have worked hard to put further measures in place to avoid this happening again.'
A Shell spokesman added: 'We apologise to those customers who have been unwittingly affected and have provided refunds and compensation payments to them.'