An investigation by Ofgem has resulted in customers of an energy company receiving refunds and £50 compensation payments. The regulator announced on Friday that the energy provider will pay £525,000, and its director has agreed to step down due to severe and ongoing mismanagement that led to customers being overcharged.
Ofgem’s inquiry revealed that since 2021, Essex-based Farringdon Energy, operating as Champion Energy, lacked appropriate billing systems to effectively manage customer accounts and accurately record energy usage. This led to instances where Farringdon unlawfully retained advance payments from customers as “Early Termination Fees” without providing any energy services.
Furthermore, Farringdon neglected to issue energy bills based on actual meter readings, resulting in 159 customers, including small businesses like takeaways and convenience stores, being overcharged a total of £347,717.25. Following the investigation, Farringdon refunded these customers and provided an additional £50 as compensation for each affected customer.
Ofgem’s investigation determined that Farringdon’s breaches of its license were a result of severe and prolonged mismanagement under the sole oversight of its director.
As a result of Ofgem’s investigation, Farringdon has agreed to pay £525,000 to Ofgem’s Voluntary Redress Fund, in addition to the refunds and compensation already given to affected customers. The company will also be subject to increased regulatory scrutiny, independent audits, and must implement significant operational and governance reforms.
Moreover, the director will resign from the board of Farringdon Energy Limited as a recognition of his role in the mismanagement that led to these violations and has committed not to hold a senior management position in the company in the future.
Cathryn Scott, Ofgem’s director for market oversight and enforcement, stated: “This mistreatment of customers was a result of severe and ongoing mismanagement, necessitating the removal of the responsible director. Ofgem is content that Farringdon has taken the required steps to reimburse affected customers, enhance its procedures significantly, and comply with our enhanced monitoring requirements.”
Ofgem disclosed that Farringdon had previously been found collecting unauthorized payments for energy not supplied to customers, leading to Ofgem imposing a penalty of £214,580 in June 2025, along with £9,096 in compensation and £177,271 refunded to customers.