Business energy supplier BES has been fined £ 980,000 for failing to treat its customers fairly and running an inadequate complaints process.
Ofgem found that BES failed to fully explain important details of customers’ contracts, such as possible termination fees, price reviews and standing charges for not using a minimum amount of energy.
Ofgem’s investigation also found that the supplier’s complaints handling process was inadequate and that it wrongly blocked some customers from switching to another company, therefore forcing them to pay higher prices for their energy.
The failings, which took place between June 2010 and July 2015, were “particularly serious” because the majority of BES customers had signed up to four or five-year contracts, the regulator said.
BES had agreed to return more than £300,000 to affected customers and another £670,000 would benefit consumers via the Business Debtline.
Ofgem said BES had now improved its processes.
Ofgem senior partner in charge of enforcement, Anthony Pygram, said: “BES failed to treat its customers fairly and did not provide them with key information when signing up for contracts.
“BES’s customers were unable to make fully informed choices about their energy supply and many were signed up to four or five-year contracts without realistic ways to exit.
“This was unacceptable and is why the supplier has agreed to pay £980,000 to compensate customers directly affected and to benefit consumers through Business Debtline.”
BES head of regulation and compliance, Joel Chapman, said: “BES takes customer service and compliance extremely seriously and we apologise sincerely to the customers affected by these issues.
“We have engaged openly with Ofgem, both in the years prior to and throughout the course of this investigation, and we are pleased that the regulator agrees that we have improved our processes. Over the last 18 months we have invested heavily in additional staff, processes and IT systems to ensure we not only remain compliant, but deliver a first class level of service.
“This is the first and only investigation by the regulator in BES’s 10-year history and we have learned a number of vital lessons, which will allow us to continue working with Ofgem in an open and transparent manner in the future, while also ensuring that treating customers fairly remains central to our business.