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Ofgem announces British Gas to pay £5.6m for switching failures

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British Gas Business has been made to pay £5.6 million for incorrectly blocking business customers from switching to alternative suppliers, and failing to notify them their contract was due to end. 5.6% of objections made to customers looking to switch were invalid during 2007-2012.

Nearly £1.3 million was paid to affected customers , with a further £3.45 million to be put into an energy efficiency fund to benefit micro-businesses and pay a £800,000 penalty. The fund will offer free surveys to small businesses and installations of new boilers, lighting and renewable generation worth up to £6,000 per site.

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.”

The errors were caused by computer system problems at British Gas.

Stephen Beynon, managing director of British Gas Business, said: “We’re sorry these errors occurred and have worked swiftly to change our computer systems and processes, putting controls in place to stop this happening again.

“We take any failure to meet our obligations very seriously and will ensure that the new energy efficiency fund we have set up will be a real help to hundreds of small businesses. It will provide free expert advice and energy efficiency measures, such as new boilers, lighting and renewable energy, to help firms to manage their energy consumption and bills over the long-term.”

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