Octopus Energy has agreed to pay almost £1.5 million in redress and compensation after it failed to issue timely final bills to tens of thousands of prepayment meter customers. The UK energy regulator Ofgem concluded that the company had breached multiple service standards, affecting customer accounts dating back to 2014.
The affected customers did not receive final bills within the six-week deadline required under Ofgem’s regulations. These errors have been addressed by refunds, compensation and procedural reforms, as Octopus aims to restore confidence in its billing processes.
Prepayment Customers Left Without Timely Final Bills
An Ofgem investigation found that over 34,000 prepayment meter accounts handled by Octopus Energy between 2014 and October 2023 were not issued final bills within the required timeframe of six weeks after account closure.
According to the regulator, this delay violated Standard Licence Condition 27.17, which ensures customers are informed about their account status and any outstanding balances or credits.
The total payout agreed by Octopus amounted to £1.483 million, comprising £231,000 in refunds of unused credit and £1.25 million in compensation for affected customers. The average payment per customer was £43.
In accordance with Ofgem’s Guaranteed Standards of Performance (GSoPs), each customer was entitled to £30 for late billing, with additional compensation where necessary.
Beth Martin, Ofgem’s Director for Consumer Protection and Competition, said the failure was particularly significant because “prepayment meter customers are more likely to be in financial difficulty”. She welcomed the steps Octopus had taken to rectify the issue and provide redress.
Octopus Response and Regulatory Compliance
In response to the findings, Octopus Energy has implemented reforms to its billing systems to ensure compliance moving forward. The company stated it has updated its processes to guarantee that prepayment customers now receive final bills promptly. In addition, it voluntarily wrote off debt for customers affected during the period of non-compliance.
Where possible, refunds and compensation were paid directly into customer accounts; otherwise, cheques were issued, and efforts made to trace uncontactable customers using a third-party agency.
According to Ofgem, any unclaimed funds by September 2025 will be transferred to the Energy Industry Voluntary Redress Fund (EIVRS), which supports vulnerable energy users.
Octopus cooperated with the inquiry and, according to Ofgem, has demonstrated a willingness to resolve the failings and improve future performance. The regulator has reiterated the importance of transparency and timely self-reporting from all licensed suppliers.
