British Gas Business fined £5.6m for preventing businesses switching supplier

British Gas' business supply arm has been fined £5.6 million after a series of investigations found that the big six energy supplier had incorrectly blocked businesses from changing to another supplier.

Two separate investigations into British Gas Business were carried out by industry regulator Ofgem.

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Why has British Gas been fined?

The first, conducted in 2012, found that faults in the British Gas computer systems had stopped its business energy customers from switching over a period spanning five years - between 2007 and 2012. The glitch meant that 5.6 per cent of the company's objections to customers switching during that period weren't valid.

With the second investigation, Ofgem found  that around 1,200 small business customers were not told their tariff was coming to end, and this meant they weren't prompted to look around for a better energy deal, before being rolled over on their existing tariff or onto a standard tariff rate.

British Gas Business, has already paid almost £1.3 million compensation to affected customers. It will also pay around £150,000 to customers who were affected by the issue, but have since switched to another energy supplier, an £800,000 penalty, and a further £3.45 million into an energy efficiency fund.

British Gas Business' managing director, Stephen Beynon, apologised in a statement.

He 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," Mr Beynon added.

Ofgem's senior partner in charge of enforcement, Sarah Harrison, stated that British Gas had co-operated fully throughout the investigations, a factor that had been reflected in the size of the settlement package.

She stated: "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."

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Les Roberts - Energy Expert at UKPower

Les Roberts - Energy Expert at UKPower

If you’ve got an issue with your energy supplier, our consumer champion Les is on hand to help. A decade in consumer affairs means Les understands how confusing energy tariffs can be, so he'll cut through the jargon to help make sure you get the best deal.