Energy provider Utilita has agreed to pay £500,000 in compensation for “mistakenly overcharging” almost 40,000 pre-payment customers.
Bills were £125,000 higher than they should have been between May and September 2019, regulator Ofgem said.
Utilita has refunded all affected customers and agreed to pay a further £500,000 in redress.
It reported itself to Ofgem, which said it would take no further action against the company.
The energy firm, which has 800,000 customers, overcharged around 6,600 prepayment customers by about £22,700 over the prepayment price cap.
It also overcharged about 33,000 customers £105,000 more than the amount they should have paid under their advertised tariff, but below the prepayment cap.
As a result Ofgem said the firm would:
Ofgem said Utilita had accepted its shortcomings and the adverse impact on customers and brought in measures to prevent the issues reoccurring.
The regulator said it closely monitored suppliers’ compliance with the price cap, which is designed to ensure consumers pay a fair price for their energy.
“This case sends a message to all suppliers that Ofgem will intervene if they charge customers above the level of the cap or above advertised tariffs,” said director of enforcement Cathryn Scott.
“It also shows that, where appropriate, Ofgem is prepared to work with suppliers who have failed to comply with their obligations, but who have self-reported and are willing put things right quickly.”