British Gas in the news again

It’s safe to say that energy com­pa­nies are not everyone’s best friend in 2014.  Nor are they top of our Christ­mas card lists — espe­cially when what the send us back in the post isn’t nearly as wel­come.   And with find­ings such as this recent dis­cov­ery from Ofgem, it’s really not surprising.

Of course a large aspect to the smooth run­ning of the energy indus­try is the power in the hands of the con­sumer to switch their energy provider.  That’s where Busi­ness can help, track­ing the mar­ket to find the best deal for your busi­ness, and then facil­i­tat­ing that switch.  How­ever, that only works if all par­ties allow the cus­tomer to trans­fer smoothly to other deals.  And it has now come to light that British Gas have been unfairly block­ing their own cus­tomers from doing so.  Many of these cus­tomers were small busi­nesses, per­haps much like your own, pre­vented by British Gas from mov­ing to more com­pet­i­tive deals, and cheaper tar­iffs, at the end of their contract.

The gov­ern­ment make great play of the power of the con­sumer to make their switch… now as fun­da­men­tal as the switch that turns the lights off and on in the first place.  How­ever, if this aspect of the mar­ket is tam­pered with, it brings the whole model crash­ing down.

So what hap­pened?  Well put sim­ply, British Gas failed to inform cus­tomers when their con­tracts were end­ing — as they are con­trac­tu­ally obliged to do – at which point they can legit­i­mately move to another tar­iff.  Equally, fur­ther errors actu­ally hin­dered busi­nesses who were seek­ing new deals.  We may per­haps agree with British Gas that this was down to gen­uine error on their part, with the provider claim­ing faults in their com­puter sys­tem meant that 1,000 busi­ness cus­tomers were not informed their con­tract was com­ing to an end.  What­ever the rea­son, this meant they were unaware they were able to con­tract a bro­ker such as Busi­ness to help them source a more com­pet­i­tive deal.

Under cer­tain con­tract deals, or where monies are still owed to British Gas, the provider is legally able to block cus­tomers mov­ing.  How­ever, due to this com­puter issue, nearly 6% of such blocks were found to be erro­neous.  British Gas is owned by Cen­trica, and is one of the so-called “Big 6”.  Just the busi­ness side of British Gas alone has 500,000 cus­tomers, so that rep­re­sents a great many affected businesses.

In this instance Ofgem has promptly stepped in, issu­ing a fine of £5.6 mil­lion, which includes a pay­out of £1.4 mil­lion to affected busi­nesses, as well as fines and a demand to con­tribute towards energy-efficient mea­sures for busi­nesses.  Ofgem also pointed out the fine would have been more if British Gas hadn’t co-operated in the inves­ti­ga­tion.  British Gas have since apol­o­gised, and responded that they have changed com­puter sys­tems to make sure the same mis­take doesn’t reoc­cur.  Mean­while more cyn­i­cal ana­lysts might point out they gen­er­ated hun­dreds of mil­lions of pounds by pre­vent­ing busi­nesses leav­ing, of which a fine of £5.6 mil­lion stands as a pretty good busi­ness investment.

In any case, the rul­ing is wel­come news, and means that even more cus­tomers can now turn to bro­kers such as Busi­ness Gas, to ensure they are on the most com­pet­i­tive deal in the marketplace.

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