Ovo has agreed to pay a £10.4million penalty to settle the energy regulator's probe into the treatment of its prepayment meter customers.

Regulator Ofgem said Ovo's 'inadequate monitoring' of customers with the meters led to a breach of rules designed to protect vulnerable customers between 2018 and 2024.

The energy supplier had exposed consumers 'to a clear risk of harm', with some households not receiving the protections they were entitled to. 

Ovo will now pay £7million to the regulator's Voluntary Redress Fund, and a £3.4million package of credit and debt relief for some of its customers, in lieu of compensation.

Cathryn Scott, director of market oversight and enforcement for Ofgem said: 'It is clear that Ovo fell short in its support of vulnerable prepayment customers, and it's right that they've taken action to improve their processes.'

Ovo was investigated over the treatment of its existing customers, including its failure to monitor and accurately record interactions, and that 'key checks and safeguards were not always carried out'.

Last month, British Gas paid a £20million penalty to settle an investigation into the forced fitting of prepayment meters.

It followed a three-year probe into one of Britain's largest energy companies after it emerged that debt agents working for British Gas had broken into the homes of vulnerable customers to fit the meters.

An Ovo spokesman said: 'We accept that some of our historic processes fell short of expected standards, and we are sorry for that.

'Keeping our customers safe and supported is hugely important to us and we recognise there were areas where we needed to do better.

'We have since worked to strengthen our policies and systems, including a new Safe and Reasonably Practicable (SARP) policy, strengthening how we identify and support our vulnerable customers. 

'This settlement reflects both those historic issues and the improvements we have made.'

Customers who are due payments will be contacted by Ovo and do not need to take any action.

The energy firm is also in the process of paying £1.1 million to customers in the Scottish Highlands and Islands after it was found that some customers didn't have access to engineer support between January 2022 and April 2024.