British Gas have been hit with a landmark £2.5m fine over its policy on customer complaints by Ofgem.
After a year-long investigation, the energy regulator said British Gas had “basic failures” in its procedure for making complaints. The company was especially criticised for some of its dealings with smaller business customers. They found British Gas had failed to give customers full details about how they could be helped in response to complaints, and had not examined unresolved complaints again if customers had queried initial responses.
It is thought to be the biggest fine ever handed out to an energy company over their complaints procedure. British Gas called Ofgem's finding "totally disproportionate", although it did admit that it failed when dealing with micro-businesses. A spokesman said: "Specifically for our micro-business customers, we acknowledge our service fell short of what they should expect from British Gas, for which we apologise."
A financial blog has said that this fine is likely to prompt British Gas to improve its complaints procedures, something that was hailed as "always good news for customers." British Gas has reportedly invested £4m in its customer complaints procedures and is now "confident" of its ability to meet Ofgem's requirements.
Ofgem is also currently looking two other energy companies, EDF Energy and Npower, over their handling of customer complaints.
The fine comes in the same month Ofgem fined British Gas £1m for failing to correctly report electricity it supplied under renewable energy laws. However, neither fine is likely to hurt the energy company's bottom line. British Gas' profits rose 24% last year, to a total of £742m.
In addition, with British Gas' electricity and gas prices to increase by nearly 20 per cent in August, there have been calls for Ofgem to focus on rising prices. Audrey Gallacher, of watchdog Consumer Focus, said "Major questions are still hanging over whether pricing is fair, whether companies mis-sell energy on the doorstep and many others. Ofgem has a big job on its hands, but this is a good sign that it is prepared to step up."