Shell reported its “operational issues” to Ofgem after thousands of customers on default tariffs paid more than the regulation price cap.
This occurred during the price cap window from January 2019 to September 2022 due to some meters not being updated correctly, the company said.
Who will get a refund from Shell energy?
Customers who were overcharged in this period do not have to request a refund and will be paid automatically, after being contacted directly by the company.
Each customer will receive approximately £9.40 as a refund payment and an additional compensation amount.
Ofgem’s voluntary customer redress fund will be handed to charities, trusts, organisations and consumers as a result of breaches of licence conditions – at an additional amount of £400,000.
Neil Lawrence, Director of Retail, Ofgem said: “Ofgem expects suppliers to adhere to the terms of contracts they have with customers, particularly ensuring they pay no more than the level of the price cap.
“Households across Britain are already struggling with rising energy bills and living costs. Overcharging by suppliers can cause additional and unnecessary stress and worry at what is already a very challenging time for consumers across the UK.
“Ofgem is always prepared to work with suppliers who have failed to comply with their obligations, but who have self-reported and are determined to put things right, as Shell has done here.
“The contributions Shell has made to the redress fund will help to support vulnerable consumers with their energy bills.”
A Shell spokesperson said: “We’re sincerely sorry that errors updating our prepayment meter rates resulted in some customers being overcharged for a period of time.
“As soon as we identified the issue we began taking steps to put it right and self-reported it to Ofgem.
“The overcharge, which averages £9.40 per customer, will be refunded along with a gesture of goodwill. We will be writing to customers to let them know.”