Nearly 1,400 OVO customers are to receive compensation after the energy firm was hit with a £2.37m penalty for complaint handling failures.
Energy regulator Ofgem said the firm, one of the UK’s largest energy companies, will pay more than £378,000 directly to affected customers.
Due to the “severity of consumer detriment”, OVO has also paid £2m to the Energy Industry Voluntary Redress Scheme – a fund supporting customers and developing energy projects.
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Jacqui Gehrmann, from Ofgem, said OVO “failed to adequately protect and respond to their customers when it was needed most”.
“This is not acceptable,” she added.
OVO is Britain’s fourth-biggest household energy supplier and has about four million customers.
As many as 1,395 people were affected by lengthy delays in having complaints addressed, Ofgem said, with some waiting 18 months.
Affected customers will be contacted directly and do not need to take any action, it added.
When complaints were escalated to the Energy Ombudsman, there were delays in taking action on the decisions, the regulator said.
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Since Ofgem became involved in June, the regulator said OVO had made improvements in its complaints process.
Concerns had been raised over the time it took the company to address complaints referred by Citizens Advice Scotland and to take action on decisions from the Energy Ombudsman.
An OVO spokesperson said: “We’re now third in the Citizen Advice energy supplier rankings for service.
“However, we recognise that a particular group of our customers in 2023 waited longer than we’d like for a resolution and were overdue a response from us, so we’ve sent them a letter of apology and compensation to help.”