British Gas Business ‘incorrectly blocked’ businesses from switching energy provider resulting in a £5.6 million fine, a report by Ofgem announced this morning.

British Gas failed to notify over 1,000 customers that their tariff was due to expire, which meant they could not then shop around for a better deal, the reports said.

An energy supplier is allowed to prevent businesses from switching when certain debts are owed and the contract allows it, however errors in their computer system meant that around 5.6% of British Gas Business’ objections to switching were invalid.

Sarah Harrison, Ofgem Senior Partner in charge of enforcement said:

“The ability for consumers to switch easily and fairly is key to a well-functioning energy market. In these cases British Gas Business failed these consumers who were wrongly blocked from switching, many of them small businesses, and denied others the chance to switch to a better deal at the end of their contract.

“British Gas Business fully accepts its failings, has stopped the practices and corrected its processes to prevent this happening again. The company has taken responsibility for its actions and this package strikes a balance of penalty for the company and redress for affected consumers.”

Of the £5.6 million package, £3.2 millions will be paid into the Energy Efficiency Fund in recognition of the invalid objections – this fun provides energy efficiency measures, such as insulation and new boilers, to micro-business customers. £1.4 million will be paid directly to businesses who did not renew their renewal notice on time and British Gas Business will pay a £800,000 bonus.

The report states that British Gas Business cooperated fully throughout these investigations and this has been reflected in the level of the settlement package, which would have been much higher if this had not been the case.

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