Ofgem’s investigations found that British Gas Businesshad incorrectly blocked business customers from switching to other suppliers and failed to notify customers when their contract was due to expire. In recognition of these failures, British Gas Business is paying £5.6 million in redress and penalty.
Ofgem found that from 2007-2012 around 5.6% of the objections made by British Gas Business to non-domestic customers wanting to switch suppliers were invalid This was caused by errors in British Gas Business’s computer systems, and there being inadequate processes and controls in place to detect when objections to switches were invalid. In addition, they did not properly communicate to customers the reasons for their objections to switching and how customers could resolve this. Ofgem opened the investigation into British Gas in 2012 and they resolved these issues swiftly. British Gas Business will pay an £800,000 penaltyand finance an Energy Efficiency Fund to benefit micro-business customers.
In a separate investigation, Ofgem found that British Gas Business failed to give notice to around 1,200 business customers (most of which were micro-businesses) that their tariff was about to expire. This meant that customers were denied the prompt to shop around for a better deal and instead either continued on the same terms or were rolled over onto standard tariff rates, which were more expensive than their previous contract. British Gas Business has already paid back nearly £1.3 million to fully compensate all current customers affected by this issue, and is in the process of contacting and paying back around ,£150,000 to affected customers who have since moved to other suppliers. If they cannot find those customers, the remaining| money will also go into the Energy Efficiency Fund.
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.”
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.