Ofgem turns up heat on British Gas with £2.5m fine

British Gas has received a record fine from Ofgem for failing to act on customer complaints. But will it make any difference?

by Dave Waller
Last Updated: 27 Jul 2011
Rapped knuckle time for British Gas: Ofgem has found that the energy giant, which serves nearly half the UK’s households, failed to reopen complaints when customers indicated that the company had yet to resolve them. Naughty naughty.

And there’s a specific note for small businesses too, with companies employing under 10 people singled out as a particular victim. The regulator also said British Gas had failed to provide key information about complaints to the energy ombudsman.

And so it slapped the energy company with a £2.5m fine. Is that up to much? Well it is the largest ever issued by Ofgem for customer service issues, described by the watchdog as a warning to all energy companies to take complaint handling seriously and treat their customers fairly. Indeed, the much-maligned regulator is using it as an example of its ‘tough approach to enforcement’. It’s also doled out a further £10m of fines to others in the energy industry already this year, in what it describes as a ‘clear message to energy companies that they must abide by the rules’. Hmm.

Cynical customers have already expressed concern that the company won’t really care too much about parting with £2.5m when it’s pushing its gas and electricity prices up by an average of 18% and 16% respectively from 18 August. Indeed, you’d have thought with those kind of figures you’d be able to afford a little customer service.

Then again, this is the energy sector we’re talking about, and by the looks of things they tend to play by different rules. Ofgem is also investigating Npower and EDF Energy for complaint handling; Scottish Power, Scottish and Southern Energy, EDF Energy and Npower for misselling; and is undertaking two investigations into Scottish Power for potentially misleading marketing and the difference between its Standard Credit and Direct Debit Tariffs.

All of which seems glaringly anachronistic. In an age of Twitter and social media, and the move towards greater openness and honesty it engenders, any other sector would have been given a wholly effective ticking off by its customer base by this point. The trouble is, British Gas and the like have their punters over a barrel, albeit one that’s well-heated. Beyond griping a bit, the public have little option but to remain there getting burned.

Adding a fine is always a bit of a counter-productive option, as it’s the punters who’ll probably end up covering the cost anyway. If Ofgem’s looking for popularity, it would have been far better off forcing those prices down.

Tags:
Finance Energy

Find this article useful?

Get more great articles like this in your inbox every lunchtime

Subscribe

Get your essential reading delivered. Subscribe to Management Today