Ovo Energy is to pay out more than £10 million after Ofgem found vulnerable customers were left at a risk of harm.
The payment follows an investigation by Ofgem into the energy supplier’s handling of prepayment meter customers, including those on the priority services register.
Ofgem found that poor monitoring and oversight led to breaches of rules designed to protect customers in vulnerable situations, exposing consumers to a clear risk of harm.
Cathryn Scott, director of market oversight and enforcement for Ofgem, said: "It is clear that Ovo fell short in its support of vulnerable prepayment meter customers and it’s right that they’ve taken action to improve their processes.
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"As a result of our investigation, vulnerable customers will receive debt write-off or credit payments alongside a payment into our voluntary redress fund.
"Prepayment meters are a positive choice for many customers, helping them stay in control of their energy use and reporting high levels of satisfaction – but it’s not suitable for everyone and strong monitoring must be in place to protect vulnerable consumers."
Ovo has agreed to pay £7 million into Ofgem’s voluntary redress fund, with a further £3.4 million allocated in credit and debt relief for affected customers.
Ofgem stressed that the investigation focused on Ovo’s handling of prepayment customers and not on the issue of forced meter installations.
The regulator said: "Ofgem’s investigation found that Ovo failed consistently to monitor and accurately record customer interactions, with evidence showing that key checks and safeguards were not always carried out.
"These gaps in oversight risked missing signs of vulnerability, leaving some customers exposed to harm."
Additional problems were found in staff training materials, which Ofgem described as "at times unclear, inconsistent and contained conflicting guidance."
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Ovo said it has since strengthened its policies and systems, including a new policy to identify and support vulnerable customers.
A spokesperson for the energy supplier said: "We accept that some of our historic processes fell short of expected standards and we are sorry for that.
"Keeping our customers safe and supported is hugely important to us, and we recognise there were areas where we needed to do better."
The company will also pay an extra £1.1 million to customers in the Scottish Highlands and Islands, after failing to provide adequate engineer support in rural areas between January 2022 and April 2024.
Earlier this year, Ovo was ordered to pay £2.77 million in compensation to nearly 12,000 vulnerable customers who faced delays in receiving their warm home discount support.
The latest action is part of Ofgem’s ongoing crackdown on the prepayment meter market.
Last month, British Gas agreed to pay £20 million in compensation following the unauthorised installation of prepayment meters in customers’ homes.
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