Ovo Energy is to pay £2.37 million in compensation and redress payments for failings in handling customer complaints.

The regulator Ofgem said that 1,395 Ovo customers were affected by lengthy delays in having their complaints addressed, with some waiting as long as 18 months.

It said there were also delays in the energy supplier taking action on decisions by the Energy Ombudsman. The ombudsman’s decisions are legally binding and suppliers have to implement them within 28 days.

Ovo will pay £378,512 in compensation to affected customers and has paid £2 million to the Energy Industry Voluntary Redress Scheme “in recognition of the severity of consumer detriment caused”, Ofgem said.

Customers will be contacted directly by Ovo, the regulator added.

Jacqui Gehrmann, deputy director of retail compliance at Ofgem, said: “Ovo failed to adequately protect and respond to their customers when it was needed most. This is not acceptable.

“Consumers deserve a clear and timely response when they make a complaint, and that’s why we stepped in quickly when we identified that Ovo’s performance was falling below acceptable standards.”

Ofgem first contacted Ovo in June last year after reported concerns over the time taken to address complaints referred by Citizens Advice Scotland’s Extra Help Unit, as well as to action decisions from the Energy Ombudsman.

The ombudsman said: “We welcome today’s news that, following compliance engagement between Ofgem and Ovo, consumers will be compensated for Ovo’s failures to implement the remedies set by the Energy Ombudsman.

An Ovo spokeswoman said: “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.”

Ovo was founded in 2009 to challenge British Gas, EDF Energy and E.on. It is now one of the biggest energy suppliers in the country.