'This is a shocking failure': Ovo to pay £2.77m in compensation after warm home discount payment delays

Of these, 7,726 were on the priority services register, meaning they were vulnerable customers, and 4,066 of these were classed as medically vulnerable.

Ofgem said Ovo fell “significantly short of its obligations” in providing the crucial support.

The supplier will pay £2.77 million in compensation directly to affected households, including £150 for all impacted customers, an extra £150 for medically vulnerable customers, and £100 for cases of so-called self-disconnection between March 31 and May 31 2024 – where a customer on a prepayment meter did not have enough money to top-up their meter and let their meter cut out.

The warm home discount scheme supports energy consumers on low incomes and who are vulnerable to cold-related illness or living in fuel poverty.

The rebate is targeted at low income pensioners and other low income groups and last year, suppliers spent a combined £578.7 million supporting these households through the government scheme.

In a statement issued on Thursday morning, Neil Lawrence, director of delivery and schemes at Ofgem, said: “The warm home discount is a vital source of support for vulnerable energy consumers.

“Delays of this magnitude can cause real harm, particularly for those experiencing fuel poverty who also have medical needs.

“Suppliers must act swiftly and accurately to deliver these payments on time – where this does not happen, we will intervene and are prepared to take strong action.”

He said: “Failures of this kind are unacceptable, and we will continue to intervene where necessary to ensure customers receive the support they are entitled to.”

Ofgem administers the warm homes discount scheme on behalf of government.

Ofgem said Ovo missed the deadline due to an internal error, which it reported itself to the watchdog last year.

Following an investigation, Ovo has since changed its systems and Ofgem said “we recognise the positive steps the company has taken” to address the error.

An Ovo spokesperson said: “We’re very sorry that some customers did not receive their warm home discount payments on time.

“We have worked closely with Ofgem to understand what went wrong and to put measures in place to ensure it does not happen again. We did not meet the high standards of service we set for ourselves, and all affected customers have now been compensated.”

Simon Francis, coordinator of the End Fuel Poverty Coalition, said: “This is a shocking failure that left thousands of vulnerable households without vital support when they needed it most.

“No one should be forced to go through winter without support because a supplier failed to meet its obligations.

“While compensation is right, it does not undo the harm caused by people missing out on help during the coldest months, when the risks to health and safety are highest."