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If OVO became insolvent, would customers in credit lose their money?

  • 14 November 2017
  • 7 replies
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I am running up a large credit balance because my energy usage has decreased dramatically and will not be increasing again so OVO`s debt to me is going to be considerable . Out of curiosity , if OVO or any other energy supplier should become insolvent , would customers in credit lose their money ?
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Best answer by Tim_OVO 7 December 2017, 13:11

If OVO or any other energy supplier should become insolvent , would customers in credit lose their money?

Interesting question, @pip707 - I think we might struggle to find an OVO Forum user who can answer this for sure.

I can say that OVO do not have the same guarantees to credit balances as a bank does. We offer an interest on credit balances up to £1000 but actively refund credit balances that are deemed to be excessive.

OVO aren't going anywhere any time soon, but if you've got a nice credit balance that you don't need for this winter's high usage, sort out a refund yourself via My OVO here: http://ovoener.gy/myovo.

Tim
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If OVO or any other energy supplier should become insolvent , would customers in credit lose their money?

Interesting question, @pip707 - I think we might struggle to find an OVO Forum user who can answer this for sure.

I can say that OVO do not have the same guarantees to credit balances as a bank does. We offer an interest on credit balances up to £1000 but actively refund credit balances that are deemed to be excessive.

OVO aren't going anywhere any time soon, but if you've got a nice credit balance that you don't need for this winter's high usage, sort out a refund yourself via My OVO here: http://ovoener.gy/myovo.

Tim
In truth, I didn`t think there were any guarantees. . Ovo make much of the interest they pay on credit balances and encourage their customers to leave their money at Ovo on the strength of that interest. Its a bit of a fine line really . Should OVO , in effect be offering themselves as some kind of savings bank while being in no way regulated as such? I think it needs to be investigated as to whether OVO should be making it clear that customers money is not guaranteed to be secure

I’m now in my second year with OVO so earning 4 per cent on credit balances which is pretty good in the present climate. But how safe are these funds? Are they FSCS protected?

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Hi @Johnf 

I am not sure I understand your question as OVO is not a bank.

I know that OVO is not a bank hence my question! - I am wondering what security if any I have for funds deposited to my a/c...

Userlevel 6

I’ve moved your post here, @Johnf, there’s some handy info in @Tim_OVO’s answer. 

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Hi @Johnf I checked this when I first switched to OVO.

No, your have no protection for funds held on your account by OVO. It doesn’t fall within the FSCS remit. An energy account isn’t an investment.

If OVO fell into administration, the administrators would analyse the situation and report to the Court their proposed strategy to distribute whatever funds they are able to realise from the available assets.

I would expect them to look more favourably on those customers who kept their account in credit by an amount equal to the forecast bill for the current month, because that’s within Ofgem guidelines.

The court is less likely to favour those who kept their accounts above £500 simply to earn the interest.

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