Octopus Energy has been forced to refund £1.5 million to customers following an Ofgem investigation. The nation’s largest energy supplier is paying out £43 on average to impacted prepayment customers.

The regulator found that more than 34,000 prepayment meter customers didn’t get their final bill in time between 2016 and October 2023. Under Ofgem rules, the final bill must be supplied within six weeks so customers know whether they are in credit or debit. Now Octopus is being forced to pay back £231,000 left in closed accounts, and £1.25 million in compensation to affected customers. Ofgem said all customers should receive their compensation by September. Octopus is attempting to contact those affected. The money will be paid directly into the energy account of those still with Octopus, and others will receive cheques.

If ex-customers cannot be contacted, their money will be paid into the Energy Industry Voluntary Redress Fund, which funds projects and schemes to support energy customers.

Beth Martin, director for consumer protection and competition at Ofgem, said: “It’s important that customers receive final bills in accordance with our rules, so they are aware of any credit remaining on their accounts and can reclaim it.

“This is particularly important for prepayment meter customers who are more likely to be in financial difficulty.

“We are pleased that Octopus has now rectified the error and put things right with its customers, offering both refunds and compensation where it’s due. 

“We will continue to closely monitor compliance with our billing rules, and drive improvements in the sector so customers can expect the highest standards of service from their energy supplier.”

However Octopus argued that their policies have saved customers over £7million compared to Ofgem policies, and said they had had “zero customer complaints”, reports The Sun.

It argued that issuing a final bill to prepayment customers is “impossible to implement in most cases” because 60% don’t notify Octopus when they move, and the energy company only has bank details for 10% of prepay customers.

The energy firm said it leaves any remaining credit on the meter for incoming tenants to use and had been charging prepay customers around £70 below the price cap.