British Gas fined £200,000 for stopping customers switching

British Gas was fined £200,000 by the energy regulator Ofgem yesterday for preventing almost 5,000 customers from switching to rival suppliers.

Ofgem's chief executive, Callum McCarthy, said British Gas's actions were a "clear abuse" of the rules which allow companies to stop customers from changing supplier only if they are in debt. The 5,000 British Gas customers all paid by direct debit so it was technically not possible for them to be in debt.

This is only the second fine imposed by Ofgem since it was granted new powers a year ago to clamp down on market abuses. In October London Electricity was fined £2m for mis-selling gas and electricity.

Ofgem said that the fine on British Gas was designed to deliver a warning to the other energy companies that the regulator would not tolerate such "unacceptable behaviour".

Mr McCarthy added: "This decision should send out a clear message to companies that it is not enough simply to have good intentions as to their obligations. They must follow them in practice."

British Gas said the number of customers affected represented just 0.3 per cent of its two million gas and electricity customers who had successfully switched suppliers between January and July of last year.

A spokesman stressed it had been a technical and unintentional breach of its licence which had arisen because a small number of staff had incorrectly applied procedures. "As soon as it was spotted, we clarified procedures, retrained staff and notified Ofgem," he added.