By Marcus Leach

Energy company E.ON has agreed to pay £1.4 million in compensation to 94,000 consumers after incorrectly charging them exit fees, or for overcharging following price rises.

In addition, E.ON has agreed to make an additional payment of around £300,000 as a goodwill gesture to a consumer fund which they run in partnership with Age UK.

"Ofgem has put in place protections for consumers so they can get a fair warning if their supplier puts up prices and time to shop around for a better deal," said Sarah Harrison, of Ofgem.

"E.On has accepted it failed to meet these protections. This announcement that E.On will compensate customers is a positive step by the company to put right their mistakes and is welcome."

Corin Taylor, Senior Economic Adviser at the Institute of Directors, welcomed the news.

“Consumers will be pleased to see action taken against overcharging in the energy sector," he said.

"Ofgem must watch the markets like a hawk to identify and punish anyone who rips off the public or business customers. Ultimately, we need to prevent this kind of behaviour from happening in the first place by making the market more competitive and transparent.”

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