The UK’s largest energy supplier will be penalised for not letting customers know their contracts were coming to an end, and even preventing them from switching to alternative suppliers.

British Gas was found guilty of preventing customers from switching to alternative providers

The energy regulator Ofgem has handed down a massive fine to the Centrica-owned British Gas of £5.6m, after concluding that it had wrongly objected to businesses switching suppliers due to computer system flaws.

Suppliers are allowed to object to a transfer when they receive a request, but only if they have a fair reason to do so. Such reasons include the company still being in contract, or having not paid the balance of their account at the end of a contract.

British Gas however, was found to be objecting to contracts with no grounds to do so. Around 5.6% of their objections had no valid reason, it was discovered.

Sarah Harrison of Ofgem 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 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.”