Ovo Energy has agreed to pay £2.37 million in compensation due to mishandling customer complaints.

The regulator Ofgem reported that 1,395 Ovo customers experienced significant delays in the resolution of their complaints, with some individuals waiting up to 18 months.

Additionally, there were lapses in the company’s response to decisions made by the Energy Ombudsman, whose rulings are legally binding and are required to be acted upon within 28 days.

As part of the settlement, Ovo will compensate affected customers a total of £378,512 and has contributed £2 million to the Energy Industry Voluntary Redress Scheme, acknowledging the serious consumer harm caused, according to Ofgem.

Affected customers will receive direct communication from Ovo regarding their compensation, the regulator confirmed.

Jacqui Gehrmann, the deputy director of retail compliance at Ofgem, stated: “Ovo failed to adequately protect and respond to their customers when it was needed most. This is not acceptable.”

“Consumers deserve timely and clear responses to their complaints, which is why we intervened promptly upon discovering that Ovo’s performance was below acceptable standards.”

Ofgem’s initial engagement with Ovo began in June of the previous year, following concerns raised about the delays in addressing complaints forwarded by Citizens Advice Scotland’s Extra Help Unit, as well as mistakes in responding to the Energy Ombudsman’s decisions.

The Energy Ombudsman welcomed the news, stating: “We are glad that, following compliance discussions between Ofgem and Ovo, consumers will be compensated for Ovo’s failures in implementing the remedies dictated by the Energy Ombudsman.”

An Ovo spokesperson commented: “We understand that some of our customers had to wait longer than we would have preferred for resolutions in 2023. We have reached out to these customers with an apology and compensation.”

Since its inception in 2009, Ovo has positioned itself as a challenger to traditional energy giants such as British Gas, EDF Energy, and E.on, and has grown to become one of the largest energy suppliers in the UK.