Atlantic Gas sells customer list to Northern Electric

Atlantic Gas, the controversial company which charged people a pounds 30 up-front fee to guarantee the cheapest fuel deal, has sold its database of 40,000 customers to Northern Electric.

In a deal revealed last night, Atlantic has also become a gas marketing agent for Northern Electric, although the Manchester-based company's doorstep sales force has stopped charging people in advance.

Tim Mulcahy, a 36-year-old who brought over the Atlantic concept from Canada, said Northern Electric had paid "less than pounds 1m" for the customers.

The 40,000 households will get their up-front payments back in the shape of a rebate, but only if they stay with Northern Electric for a year.

Atlantic was investigated by Ofgas, the industry watchdog, but the company did not operate as a licensed supplier and no direct action was taken.

Ofgas subsequently changed the regime so that existing gas companies could not take over new Atlantic customers who had paid a fee in advance, though the new rules did not apply to existing customers.

Mr Mulcahy yesterday insisted that Atlantic had not profited from the venture, although the company is believed to have raised about pounds 1m through customer payments.

"We're making a loss out of this," he said. "I haven't taken a penny out and there have been no profits for shareholders."

Northern Electric admitted Atlantic had caused controversy, but said it was "willing to come in to deal with a difficult situation."

An Ofgas spokesman said: "Our concern was that people who signed up would get their money back and it does appear that this will happen."

However Neil Lambert, commercial director of rival supplier Calortex, said he had also been approached by Atlantic and had thrown the offer document in the bin.

"They were taking advantage of the most vulnerable customers. They didn't need to pay pounds 30 to find the cheapest gas," he said.