Incorrect energy bills: your compensation rights

Receiving an incorrect energy bill can be frustrating, but you have clear rights and a process to follow to dispute it and claim any compensation you are owed. This guide will walk you through identifying errors, complaining to your supplier, escalating to the Energy Ombudsman, and understanding the types of compensation available.

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Understanding incorrect energy bills

An incorrect energy bill is not just an annoyance; it can lead to significant overpayments or unexpected demands. Knowing what constitutes an error and their common causes is the first step in protecting yourself.

What constitutes an incorrect bill?

An energy bill is incorrect if it does not accurately reflect your energy usage or the agreed-upon charges. This could mean you have been charged for energy you did not use, or at a rate you never agreed to. If your bill is based on inaccurate information, or if your supplier has failed to apply the correct tariff, it is considered incorrect.

Common causes of billing errors

Several issues can lead to incorrect energy bills:

• Estimated readings: Your supplier might guess your energy usage instead of using actual meter readings. If these estimates are consistently too low or too high, they can lead to large catch-up bills or overpayments.
• Wrong tariff applied: You might be charged at a rate you never agreed to, or a tariff change could be applied on the wrong date.
• Meter mis-association: This occurs when your address is incorrectly linked to another meter, causing you to pay for someone else's energy.
• Price cap overcharging: Suppliers are not permitted to charge above the energy price cap. If they do, it constitutes an overcharge.
• Faulty meters: A meter that is not working correctly can lead to inaccurate readings and subsequent billing errors.
• Administrative errors: Delays in setting up new accounts or other clerical oversights by the supplier can also result in incorrect bills.

Your rights and the back-billing rule

Ofgem, the energy regulator for Great Britain, sets the rules to protect consumers from unfair billing practices. One of the most significant protections is the back-billing rule.

Ofgem's role in protecting consumers

Ofgem (the Office of Gas and Electricity Markets) is the independent energy regulator for Great Britain. Its primary role is to protect the interests of energy consumers by ensuring fair market practices, setting standards for billing and complaint handling, and promoting value for money. Ofgem monitors how energy companies operate and can take action when they do not follow the rules.

The 12-month back-billing limit explained

The 'back-billing' rule is a crucial protection for domestic customers. It prevents your energy supplier from charging you for energy used more than 12 months ago if the supplier was at fault for not billing you correctly at the time. This means if you receive a catch-up bill for usage over a year old, and the error was your supplier's, you generally do not have to pay for that older usage. This rule applies if you have not received an accurate bill, were not informed of what you owed via a statement, or if your Direct Debit was set too low due to supplier error.

When the back-billing rule does not apply

While powerful, the back-billing rule has exceptions. You may still be liable for energy used more than 12 months ago if you have "acted unreasonably". This includes situations where you:

• Prevented your supplier from taking meter readings, for example, by repeatedly denying access to your property.
• Ignored requests for payment from your supplier.
• Knowingly used gas or electricity without informing the supplier.
• Were sent a bill for the unbilled energy within the 12-month period but did not pay it.

How to complain to your energy supplier

If you suspect an error on your bill, the first step is to raise a formal complaint with your energy supplier.

Gathering your evidence and records

To give your complaint the best chance of success, gather all relevant information before contacting your supplier. This should include:

• Your energy account number and supplier details.
• A clear summary of your complaint, detailing what went wrong and when.
• Copies of all correspondence with your energy supplier (emails, letters, notes from phone calls) and any complaint reference numbers.
• Meter readings, especially if they contradict your bill, and photos if possible.
• Evidence of any financial losses or inconvenience you have experienced.

Initial contact and formal complaint process

Contact your energy supplier directly to formally raise your complaint. You can do this by phone, email, or letter. When you call, state clearly that you want to make a complaint and ask to speak to the complaints team. Keep detailed notes of the conversation, including the date, time, and the name of the person you spoke to, and request a case reference number. If complaining in writing, make it clear in the subject line or first paragraph that it is a formal complaint.

What to expect from your supplier's investigation

Your supplier is required to have a clear and accessible complaints process. They must acknowledge your complaint promptly, provide a named contact or case reference number, and attempt to resolve the issue within eight weeks. During this period, they should investigate the problem, take action, and communicate their findings and proposed resolution to you. If they fail to resolve your complaint within eight weeks, or if they send you a 'deadlock letter' stating they cannot resolve the issue, you can escalate your complaint.

Escalating your complaint: the energy Ombudsman

If your energy supplier cannot resolve your complaint to your satisfaction, the next step is to escalate it to the Energy Ombudsman.

When to contact the energy Ombudsman

You can contact the Energy Ombudsman if:

• Eight weeks have passed since you first made the complaint to your energy supplier, and you are still not happy with the outcome.
• You have received a 'deadlock letter' from your energy supplier, which means they believe they cannot resolve the issue and you can escalate sooner than eight weeks.

The Energy Ombudsman is an independent and impartial service that resolves disputes between consumers and energy suppliers in the UK. It is free to use for consumers.

The Ombudsman's investigation process

Once you submit your complaint, the Energy Ombudsman will review the evidence from both you and your supplier. They will assess the information against relevant laws, regulations, and industry best practices to make a fair decision. Most cases are resolved within six weeks once the Ombudsman accepts your case. You will be kept updated and receive a written decision explaining the outcome.

Potential outcomes and resolutions

If the Energy Ombudsman finds in your favour, they can instruct your supplier to take various actions to put things right. These can include:

• Taking practical action, such as crediting your account, cancelling an account, or changing your tariff.
• Issuing an apology.
• Offering financial awards, including compensation for inconvenience or distress, which can be up to £10,000 for domestic customers.
• Making recommendations to prevent the issue from happening again.

Types of compensation you can claim

Compensation for incorrect energy bills can go beyond just correcting the error. You may be entitled to various forms of payment depending on the nature of the mistake and its impact on you.

Direct refunds for overpayments

If your energy supplier has overcharged you due to an incorrect bill, you are entitled to a full refund of the excess amount. This applies whether the error was due to incorrect meter readings, a wrong tariff, or any other mistake on their part.

Goodwill payments for inconvenience

Beyond direct refunds, suppliers may offer goodwill payments for the inconvenience, distress, or time you have spent resolving the issue. These are discretionary payments but can be awarded by the Energy Ombudsman if your case warrants it.

Statutory compensation for specific failures

Ofgem's Guaranteed Standards of Performance (GSOP) include specific compensation payments for certain failures by energy suppliers. If your energy company breaches certain standards, they may be obliged to pay you £40 in compensation. This amount was increased to £40 from 2 January 2025. This can apply if they fail to deliver a resolution plan for a smart meter fault within five working days of a customer reporting it. Other examples include missed appointments or delayed supplier switches.

Preventing future incorrect energy bills

Taking proactive steps can significantly reduce the likelihood of receiving incorrect energy bills in the future.

Regularly checking your bills and meter readings

Always check your energy bills for accuracy. Compare the readings on your bill with your actual meter readings. If your bills are based on estimated readings, submit regular manual readings to your supplier. This ensures you are only paying for the energy you have actually used.

The benefits of smart meters for accuracy

Smart meters can greatly improve billing accuracy by automatically sending readings to your supplier. This reduces the reliance on estimated bills and makes it easier to track your energy consumption in near real-time. For more information on how these devices work, you can read about the Aclara smart meter. If you do not have a smart meter, consider requesting one from your supplier.

Keeping good records of your energy account

Maintain detailed records of all your energy-related communications, including bills, meter readings, and any interactions with your supplier. This paper trail is invaluable if you ever need to dispute a bill or escalate a complaint. Understanding your energy usage can also help you identify potential savings, as detailed in guides like 134 energy bill savings 2026.

Fuse Energy: support for your billing queries

Managing your energy bills should be clear and easy to understand. Fuse Energy focuses on straightforward pricing, so you can see exactly what you are paying without unnecessary complexity. If you have a smart meter, you can view detailed usage data through the app or website, helping you understand how you can lower your bills. Our 24/7 human support team is always on hand with fast response times whenever you need help. Click here to switch to Fuse Energy today. Find out about our mission by clicking here.