under pressure: tony cocker, the chief executive of eon, which has been forced to pay £775million to citizens advice after the regulator found the energy giant had overcharged customers after price rises  power giant eon has been ordered to pay a £775million penalty after it ripped off customers who were switching to rivals the money will go to citizens advice to fund the organisation’s work helping those trying to cut their energy bills eon effectively overcharged thousands who decided to move to other suppliers after it announced price rises in january 2013 and again in early 2014 industry rules state that energy companies must give customers 30 days’ notice of any price rise once a customer states they intend to move, the firm is not allowed to impose an exit fee or apply the new higher tariff even if the move takes place after the date of the increase however, industry regulator ofgem found that eon broke the rules by hitting tens of thousands of departing customers with a higher tariff in the days before their account was switched the firm admitted the mistake as far as customers who paid by direct debit or cheque were concerned however, it failed to notify ofgem that it also affected people with meters until late in the investigation it has refunded £8 to £12 to 40,000 customers who paid by cash or cheque and is now trying to find another 7,000 meter customers to pay them an average of £342 while the sums involved are relatively low, ofgem imposed a high penalty because eon did the same thing in january 2012 at that time, it was ordered to refund £14million to customers and pay £300,000 in lieu of a penalty to age uk the firm claimed it had implemented new procedures to stop it happening again, but was guilty of the same mistake in both 2013 and 2014 'absolutely unacceptable': regulator ofgem said the penalty reflected eon's 'repeated failings' on billing rules after the company incorrectly imposed exit fees and overcharged customers  ofgem’s enforcement chief, sarah harrison, said: ‘our rules give customers a chance to avoid exit fees and higher costs when suppliers put up prices these are important customer protections and it is vital suppliers play by the rules the energy regulator has imposed fines on energy companies totalling £168 million since 2010 britain's big six energy suppliers are responsible for £99million of the payments, with british gas the worst offender among them with their figure totalling £346million eon has been fined £248million in total the payments are as follows:  november 2012: eon agrees to pay out £17million to customers and charities after customers were incorrectly charged exit fees or overcharged following price rises july 2013: the company agrees a £3million package of fines and money for customers after it misreported the number of energy saving light bulbs it had distributed under an energy efficiency scheme may 2014: eon agrees to pay £12million to vulnerable customers for mis selling april 2015: the company agrees to pay £775million to citizens advice to help vulnerable customers in addition to £400,000 already paid to those affected, after it was found to have overcharged in the wake of price rises ‘it is important that eon has repaid potentially affected customers and co operated with the investigation however it’s absolutely unacceptable that it failed to provide these vital customer protections yet again and this persistent failure is the reason for the high penalty’ citizens advice chief executive gillian guy said the ruling should send a warning to other firms ‘consumer rights cannot be ignored,’ she said ‘customers shouldn’t be trapped in higher bills with prices up a third since 2010 people must have the freedom to shop around for a better deal ‘consumers must be confident that the regulator will take strong action when companies fail so this judgment is welcome news ‘it is positive that the ofgem penalty will go towards helping people who are struggling to heat and light their homes’ eon apologised and has agreed to fund an independent external audit into what went wrong a spokesman said: ‘we have been open and transparent about this failure to ofgem and have agreed to make a payment to citizens advice which will be used to support its energy best deal extra engagement programme, which provides face to face energy advice ‘eon is committed to ensuring that no one will lose out financially and is pleased that the payment is going to a worthwhile cause that will provide support to those in need’
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