E.ON will give the money to British consumer charity, Citizen’s Advice as a penalty for overcharging some customers who tried to switch energy provider after the company announced price rises in 2013 and 2014, it said.

"E.ON has identified potentially affected customers and is continuing to automatically provide redress payments to ensure no-one loses out financially," the company said in a statement.

The majority of those affected were overcharged by less than 10 pounds, it said.

British energy regulator Ofgem said the penalty reflected E.ON's repeated violation of billing rules.

"Ofgem's rules give customers a chance to avoid exit fees and higher costs when suppliers put up prices," said Sarah Harrison, Ofgem senior partner in charge of enforcement.

(Reporting by Susanna Twidale; editing by Jason Neely)